Hyundai Motor Group, the world’s fifth-largest auto maker, faces a tough road ahead while global markets writhe in the agony of the coronavirus.
The going is particularly rough in the U.S., where Hyundai and its sister company Kia sold 31% fewer vehicles last month than in March 2019.
That was enough for S&P Global Ratings to hold COVID-19 responsible and conclude that “the impact of the pandemic could be worse” than originally forecast as long as the virus raged in both the U.S. and Europe.
S&P,givingthe Hyundai Motor Group a BBB rating, observed that COVID-19 was “causing production suspensions and weakening demand in the global auto industry.” The global pandemic, it said, “has amplified the challenging demand conditions in the automotive industry.”
Randy Parker, vice president for national sales at Hyundai Motor America, predicted “tough days ahead” after the company announced a 42% year-on-year drop last month in sales on the American market of Hyundai vehicles, including its Genesis luxury brand. Hyundai and Genesis, attempting to forge a separate distinctive place in the Hyundai Motor conglomerate, sold just 36,087 vehicles in the U.S. last month. Kia, a separate company within the Hyundai Motor Group, did slightly better, selling 45,413 vehicles in the U.S. in March, off 19% from March 2019.
Figures for the first quarter of 2020 showed Hyundai Motor sales in the U.S. totaling 272,775 vehicles, a drop of 5.4% from the first quarter of last year. A critical factor in the decline was the suspension of Hyundai and Kia plants in the U.S. along with the closure of many plants elsewhere.
Overall, Hyundai Motor seemed to be faring worse overseas than other Korean manufactured products. The government said exports fell just 0.2% in March, from $47 billion in March 2019 to $46.9 billion last month.
Parker placed Hyundai’s troubles in the context of problems besetting not only Hyundai but its competitors around the world.
“The entire world is facing a tremendous challenge,” he said. That’s “having a significant impact on business and our normal way of life.” Hyundai, he reassured investors and customers alike, was “doing all we can to position the company to survive this and return to the growth trajectory we’ve been on.”