This file photo provided by Kia Corp. shows its headquarters building with its company logo in Yangjae, southern Seoul. (Kia Corp.)
Hyundai Motor Co. and affiliate Kia Corp. are expected to post double-digit growth in their fourth-quarter operating profit, helped by robust domestic sales despite the coronavirus pandemic.
Strong local demand for their vehicles helped Hyundai Motor and Kia offset their weak overseas sales in the October-December period, analysts said.
Hyundai, the country's biggest carmaker, likely posted an operating profit of 1.71 trillion won ($1.55 billion) in the fourth quarter, up 37 percent from 1.24 trillion won a year earlier, according to a median forecast of market research firm FnGuide.
Hyundai's sales are forecast to rise 5.9 percent to 29.47 trillion won in the December quarter from 27.84 trillion won a year ago, with Kia's up 4.4 percent to 16.82 trillion won from 16.1 trillion won during the same period.
The quarterly results reflect strong domestic sales of new models such as Hyundai's Tucson SUV, Kia's Sorento SUV and Carnival minivan, and the GV80 SUV and G80 sedan with Hyundai's independent brand Genesis badge, analysts said.
"Improved product mix and lower incentives for overseas sales propped up their quarterly results despite the won's strength against the dollar and a temporary suspension of local plants due to the pandemic," Kwon Soon-woo, an analyst at SK Securities Co., said.
The dollar rose to an average of 1,188.54 won in the fourth quarter from 1,175.81 won a year ago. A strong won drives down the value of an exporter's dollar-denominated earnings when converted into the local currency.
Hyundai and Kia suspended their local plants several times due to coronavirus infections and their union members' industrial action for higher wages.
Decreased sales in the United States, the world's most important automobile market, kept the carmakers from reporting better results in the fourth quarter.
Hyundai and Kia, which together form the world's fifth-biggest carmaker, said their US vehicle sales fell 7.3 percent to 1,208,374 units in 2020 from 1,304,109 the previous year.
Hyundai and Kia are expected to release their fourth quarter and 2020 earnings results on Monday and Tuesday, respectively. (Yonhap)