Hyundai Motor turned in its best quarterly operating profit in more than two years and stated it was on its way for higher profit margins in 2020, powered by more sales of sport-utility vehicles (SUVs) including the Palisade and Kona.
The better-than-expected operating revenues, which fueled an increase in shares, signal measures by Hyundai Motor heir-apparent Euisun Chung to renovate the image of the automaker known for its sedan-heavy lineup were starting to pay off.
So while total vehicle sales for the automaker held mostly steady on year over October-December, its bottom line was advantageous as high-margin SUVs represented for more of the sales mix – 42% versus 37% a year ago.
Hyundai stated it would meet its target for a 5% operating profit margin in 2020, against 3.5% in 2019, by selling even more SUVs and releasing fully redesigned versions of some of its best-selling models, the Elantra sedan and the Tucson SUV.
“We understand that achieving this year’s operating profit margin of 5% is more important than ever,” stated Kim Sang-hyun, head of finance and accounting division.
“The company sees this year as the first to fully establish a virtuous sales cycle by optimizing supplies, profits and strengthening brand competitiveness,” added Kim.
“We will do our best to secure a sustainable revenue base in a difficult business environment.”
Sales for Hyundai and affiliate Kia Motors hit a seven-year low in the last year as sales in China dropped, missing their target for the fifth time, but they have forecast better statistics for this year.
Hyundai expects SUVs to represent about 43% of its sales in 2020, helped by the release of a new premium Genesis brand SUV in the second half, together with the GV80 launched last week.