Due to chip shortages, Hyundai Kia Expects Vehicle Sales to Skyrocket in 2022

SEOUL, Jan. 3 -- South Korea's Hyundai Motor Corp (005380.KS) and subsidiary Kia Corporation (000270.KS) predicted on Monday that their total global sales will grow by 12.1 percent in 2022, even though last year's sales were lower than due to a global chip shortage.

The two companies sold 6.67 million vehicles in 2021, about 3.7 percent less than their combined target of 6.92 million vehicles, largely due to lower vehicle shipments due to supply issues such as chip shortages.

They say the global sales target for this year is 7.47 million units.

Hyundai motor said in a statement: "In 2022, Hyundai motor plans to expand market share and enhance profitability by stabilizing chip supply and demand, adjusting vehicle production plans, strengthening the electric vehicle lineup, and optimizing sales profit and loss." "Statement.

Shortages have hit the automotive industry hard due to supply issues and a surge in demand for consumer electronics during the pandemic, with millions of cars worldwide unable to produce due to a lack of vital components.

Analysts say this year's target appears to be reasonable.

Lee Jae-il, an analyst at Eugene Investment & Securities, expects demand for cars to remain strong in 2022, supported by pent-up demand from consumers who were unable to buy a car last year due to supply shortages.

"It looks like the chip shortage has shown some signs of easing... However, rising raw material prices can have a (a) impact on their profitability," Lee added.

Hyundai shares closed up 0.7 percent while benchmark market KOSPI (. KS11) is up 0.4%.

In October, Hyundai lowered its global sales target for 2021 by about 4% from 4.16 million units to 4 million units.