[ANALYST REPORT] Autos: Shipments up in June despite weak exports

Hyundai Motor (HMC) and Kia Motors saw their global shipments rise a respective 9.1% and 2% y-y in June as both firms offset weak exports with solid domestic sales and overseas plant shipments, while their global shipment volume fell a respective 0.9% and 4.6% y-y to 2.39m and 1.46m vehicles over January-June.

● Domestic auto demand (excluding imports) grew 19.3% y-y in June—and 10.9% y-y to 812,000 vehicles in 1H—thanks to: 1) promotions with an excise tax cut expiring at month’s end; and 2) new model debuts. 

HMC and Kia saw domestic sales rise 11.4% and 16.7% y-y, respectively, but their exports fell 16.4% and 20.5% y-y amid MENA economic weakness.

● HMC‘s global shipments rose 4.3% y-y as Kia’s fell 3.1% y-y, with HMC faring better than Kia. Despite a steady decline in exports from Korean plants, recoveries in domestic sales and shipments from overseas plants have led the global sales at both automakers to rebound since May. 

We believe HMC, leading recent sales recovery, will show greater share price upside than Kia once sales in the emerging markets recover in 2H.


Source: Samsung Securities http://www.samsungsecurities.com/common/main.do?cmd=main