On January 25, according to the financial report of the fourth quarter of 2021 and 2021 released by South Korea's Hyundai Motor, hyundai motor's revenue for the whole year of 2021 was 117.6 trillion won, an increase of 13.1%; the operating profit was 6.7 trillion won, an increase of 178.9%; and the net profit was 5.7 trillion won, an increase of 195.8% year-on-year.
Among them, Hyundai Motor achieved revenue of 31 trillion won in the fourth quarter of last year, an increase of 6.1% year-on-year, and operating profit was 1.53 trillion won, an increase of 21.9% year-on-year. Net profit fell to KRW 701.4 billion from KRW 1.18 trillion in the same period of 2020, down 40.7% year-on-year. Net profit for the quarter was well below the previous estimate of 1.5 trillion won for fourth-quarter net profit from analysts compiled by Refinitiv SmartEstimate.
In this regard, Hyundai Motor explained that it was mainly affected by the rise in raw materials and one-time expenses related to employee bonuses, and the net profit in the fourth quarter declined. Hyundai Motor is relatively optimistic about the core shortage problem that has spread to the automotive industry for nearly a year, pointing out: "The lack of core problem has improved since December, but the impact will continue until the first quarter of this year, and it is expected to gradually stabilize in the second quarter." "
Lee Jae-il, an analyst at Eugene Investment & Securities, said before Hyundai's results: "It's hard to find a commodity whose prices won't rise, and that's not expected to change for the foreseeable future."
Pyoung-Mo Kim, an analyst at DB Financial Investment, said production normalization for Hyundai could be delayed until later this year as chipmakers such as TSMC could raise prices amid supply chain pressures.
After the news was released, on January 25, Hyundai's stock price fell by 3.6%, the largest decline in nearly three months. By the close of the day, the stock had narrowed its losses to 1.27%.
In 2021, although Hyundai Motor failed to meet the annual sales target of 4 million vehicles it had set, under the influence of the global epidemic, Hyundai Motor's global sales in 2021 increased by 3.9% year-on-year, and achieved a sales performance of 3.89 million units. According to Gaz Auto news, South Korea's automobile exports and total exports in 2021 were 2.05 million units and 46.47 billion US dollars, respectively, an increase of 8.6% and 24.2% year-on-year, which is the first time since 2012 that South Korea's automobile export volume and total export volume have increased at the same time. With the increase in overseas consumers' consumer demand for the automobile market, South Korea's auto parts exports in 2021 also increased by 22.2% year-on-year to 22.78 billion US dollars.
With the global consensus of the common "carbon neutrality" goal, the demand for new energy vehicles in foreign markets has also begun to increase. Exports of hybrid vehicles produced in South Korea increased by 71% year-on-year, and Korean car companies have maintained their leading position in the Korean hydrogen fuel vehicle market for three consecutive years. South Korea's exports of new energy vehicles already account for 20.7% of total automobile exports, which means that 1 in every 5 cars exported last year was a new energy vehicle.
However, focusing on the Chinese market, Hyundai Motor's annual sales in 2021 will be 385,000 units, down 23.3% year-on-year, and the sales target set by Hyundai Motor at the beginning of last year is 560,000 units, and the actual sales volume is far from the target sales. In addition, in the global market in 2021, Hyundai Motor only suffered an annual decline in the two major markets of China and South Korea.
It is worth noting that Hyundai Motor has set a target of more than 4.323 million vehicles in 2022, of which sales in the local market of South Korea and overseas markets are 732,000 units and 3.591 million units, respectively. In the Chinese market, Hyundai Motor's annual sales target is only 370,000 units, a year-on-year target growth rate of 3.1%, but its sales target is lower than the actual sales in the Chinese market last year.
Zhang Xiang, an analyst in the automotive industry, said: Now in China, new energy vehicles are ahead of the international market, and the national regulatory "double integral" policy is relatively strict. The 385,000 vehicles produced by Hyundai Motor will generate a lot of negative points if there are not enough new energy vehicles to support them. In other words, the more traditional fuel vehicles produced by modern automobiles, the more they sell, the more they lose. Then Hyundai Motor needs to buy positive points with other new energy vehicle companies, which is very high cost and will lose more, so now it must reduce production.
Market share is squeezed by Chinese brands
According to the statistics of the China Association of Automobile Manufacturers, in 2021, the cumulative sales of passenger cars in The Chinese automobile market for the whole year were 21.482 million units, an increase of 6.5%, of which the sales of Chinese brand passenger cars have reached 9.543 million units, an increase of 23.1% year-on-year, and the market share has reached 44.4%. That is to say, in 2021, Hyundai motor will only occupy 1.8% of the market share in the Chinese passenger car market, which is equivalent to 4% of the sales of passenger cars of Chinese brands.
As early as 2013-2016, Hyundai Motor sold more than one million vehicles in the Chinese market. From 2017 to 2021, Hyundai's sales in the Chinese market were 785,000 units, 790,000 units, 716,000 units, 502,000 units and 385,000 units, respectively, and sales have fallen sharply in the past two years.
The overall Korean car brands, led by Hyundai and Kia, originally accounted for a very low market share in the Chinese market, and sales have continued to decline in the past two years. From 2016 to 2020, the market share of Korean cars in China was 7.35%, 4.63%, 4.98%, 4.7% and 3.8%, respectively. The market sales of Chinese auto brands have increased significantly, which undoubtedly seriously squeezes the market share of other brand series.
In early 2021, Beijing Hyundai, a joint venture company of Hyundai Motor in China, has been experiencing a continuous decline in sales in recent years and a capacity utilization rate of less than 30%, and in early 2021, Beijing Hyundai sold the first plant of the Hyundai Motor Group in Shunyi, the first plant of the first vehicle manufacturing plant established in China, to ideal cars, a new power in car-making. Beijing Hyundai's first plant was put into operation in 2002 and can produce 300,000 units a year, but Ideal Auto has officially started construction at this plant in October 2021. In December of the same year, Dongfeng Yueda Kia, a joint venture of the Kia brand, which also belongs to Hyundai Motor Group, in China, was "withdrawn" by one of the joint ventures, Dongfeng Motor Group Co., Ltd., which accounted for 25% of the entire equity of the Kia brand.
"Oil to electricity" new energy market constraints
According to statistics from the China Association of Automobile Manufacturers, in 2021, the new energy vehicles in China's auto market increased by 113.9% year-on-year, with cumulative sales of 3.521 million units in the whole year. Among them, the cumulative sales of pure electric passenger cars were 2.734 million units, an increase of 120.5% year-on-year, and the cumulative sales of plug-in hybrid models were 600,000 units, an increase of 121.6% year-on-year. New energy vehicles have become an inevitable trend in the Chinese and world automotive markets, and pure electric models occupy the highest share of China's new energy vehicle market in 2021.
It is understood that as of now, beijing hyundai's product lineup has not appeared in the model based on the pure electric platform, only the "oil to electricity" model. Hyundai Motor Group only released its new E-GMP platform for electric vehicles at the end of 2020, and the IONIQ 5, which was only launched at the end of last year, is not yet domestically produced. According to Hyundai Motor's planning, beijing Hyundai will launch the first pure electric model based on the pure electric platform in 2023.
Zhang Xiang, an analyst in the automotive industry, said that Hyundai's own pure electric platform will not come out until 2023, and the current "oil to electricity" product is not competitive in the market. It has been four or five years since the Chinese market launched the "oil to electricity" car, which is no different from the appearance of the fuel car, but there is more charging interface, and there is no big screen, software ecosystem, etc. Hyundai Motor should also be soberly aware that his "oil to electricity" products are difficult to sell in the Chinese market.
Zhang Xiang said that Hyundai Motor's delay in launching a pure electric platform first did the oil to electricity, which also needs to take into account the cost of funds and time. Coupled with the rapid iteration of pure electric platform technology at present, the investment cost has not been recovered, and the next generation of new technology has begun, so modern cars are lagging behind again. At present, only Tesla is profitable, and even Wei Xiaoli is still in a loss, if Hyundai Automobile rushes to launch a pure electric platform, it will also lose money.
Strategies in China Change Begin to lay out new markets
In fact, Hyundai Motor's own brand competitiveness has gradually weakened in the Chinese market, and the original "cost performance" advantage is not obvious under the "devouring" of Chinese brands. Some people believe that the most competitive compact sedan, for example, from the Elantra to the Yuedong, to the Langdong, to the leading movement, hung the same "Elantra" tail mark, but it has long been sold as four different models. Not only does it form a "competition in the same industry" to drag down sales, but also the sincerity is insufficient.
Zhang Xiang, an analyst in the automotive industry, said that the products of China's new car-making forces are more competitive than those of most international car companies. For example, wei xiaoli's main market in China, its product experience is much better than that of traditional fuel vehicles, and its competitive advantage is obvious. The old traditional car companies like Hyundai Motor have a relatively large gap with Wei Xiaoli and Tesla in the Chinese market. In foreign markets such as the United States, the development of new energy vehicles is just starting out, like Rivian cars sold 1,000 vehicles last year. Moreover, at present, foreign policies in this regard are relatively loose, competition is also relatively loose, Hyundai Motor can still have certain advantages, but China's new energy vehicles have at least entered the Red Sea market.
In China, the world's largest auto market, if Hyundai Motor still maintains its previous strategy, it will be difficult to overturn the status quo. On January 27, Hyundai Will hold a 2022 Hyundai press conference in Tokyo next month, according to Yonhap News Agency, when the company will release news about Hyundai's re-entry into the Japanese passenger car market. In addition, Hyundai Motor will focus on electric vehicles in Japan, and the Japanese version of the hydrogen fuel cell vehicle NEXO and the electric vehicle IONIQ (Ani Krypton) 5 has been released.
Zhang Xiang, an analyst in the automotive industry, believes that if Hyundai Motor immediately produces new energy vehicles, even if it does a good job, it is still a traditional car company in the impression of investors or consumers, then investors and capital market expectations will not be too good, and Hyundai Motor's market value will not be as high as Tesla and other new energy vehicle companies. Among the traditional car companies, Hyundai's capital strength is far worse than Volkswagen and Toyota, but Toyota began to develop China's new energy vehicle market last year, and Hyundai Motor will not start to develop China's new energy vehicle market until next year.
Hyundai Motor chose to enter the Japanese market again, because the regulations on new energy in the Japanese market are different from those in China, and the Japanese market is still dominated by hybrids. Hyundai also has its own hybrid technology, which is cheaper than Japanese car companies. Coupled with the fact that Hyundai Motor also has a luxury car brand, all market segments are priced lower than those of Japanese car companies in order to be competitive and survive.
In addition, Hyundai Motor has undergone many personnel adjustments in two years, but it has not been able to save its decline in the Chinese market. Hyundai Motor (China) also has Xiang Dongping, Li Feng, Li Hongpeng, Fan Jingtao and other executives have left, on January 1, 2022, Hyundai Motor Group China Vice President Li Heyuan took over as Li Guangguo, as the president of Hyundai Motor Group (China), fully responsible for the operation and management of Hyundai Motor Group (China) Investment Co., Ltd., and Li Guangguo also began to serve as the president of Hyundai Motor Group (China) from October 2019 until he left office for only 2 years.
It is reported that Li Hequan has joined Hyundai Group since 2001 and has rich experience in government communication, corporate strategic planning, product technology "new four modernization" layout, joint venture enterprise development management, hydrogen fuel cell layout development, localization management and other fields. Some analysts said that in addition to Li Heyuan's familiarity with the Chinese market and Hyundai Motor Group, car companies also hope to use his accumulation in the field of hydrogen fuel cells to find opportunities for Hyundai Motor in China's new energy field, so as to enhance Hyundai Motor's competitiveness in China.
At the end of 2019, Hyundai Motor announced the transformation goal of "Strategy 2025". In terms of market targets, by 2025, new energy vehicles will sell 1 million vehicles and reach a market share of 10%, making it the world's third largest environmentally friendly automobile manufacturer, of which EV sales will reach 560,000 units (excluding FCEV sales). In terms of financial targets, by 2025, the automotive business aims for an operating margin of 8% and a market share target of 5%.
In 2021, Hyundai Motor's wholesale sales of new energy vehicles exceeded 160,000 units, an increase of 44% year-on-year, accounting for 4.1% of the company's total wholesale sales. Among them, Hyundai's pure electric vehicle sales reached 120,523 units, an increase of 20% year-on-year; plug-in hybrid vehicles reached 40,843 units, a significant increase of 251%. In addition, Hyundai hydrogen fuel cell vehicles sold 9,620 units, an increase of 42% year-on-year. The Hyundai IONIQ5 quickly became the company's annual electric model sales champion with more than 65,000 units sold. Among them, Hyundai IONIQ5 sold 22,671 units in South Korea, 19,219 units in Western Europe and 153 units in the United States.
If we calculate the actual sales of EV models in 2021, even if we maintain the same growth rate of 20% every year, we will only reach the sales of 250,000 vehicles by the end of 2025, which is less than half of the target sales. What is certain is that whether it is new energy or intelligent driving, the global automotive industry will be a stage of rapid development and technological renewal in the next few years. Under the competition of more and more powerful car companies in the global automotive market, in terms of the current lineup of Hyundai Motor's pure electric models, if Hyundai Motor wants to achieve the sales target of 560,000 EV models in 2025, it also needs to continue to increase investment in the research and development of new energy and intelligent driving technologies and products. In terms of the full-year operating margin of 5.7% in 2021, if the sales target of EV models is met in 2025, its operating margin is unlikely to reach the growth and achieve the target of 8%.
Zhang Xiang, an analyst in the automotive industry, said that the pure electric platform has a relatively small amount of pure electricity platform in the initial stage, the investment is relatively large, there is no economic benefit, and the return on investment period is very long, which is basically all international car companies and joint venture car companies can also clearly recognize.