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| Hyundai Motor Group Chairman Chung Euisun, left, shakes hands with U.S. President Joe Biden at Grand Hyatt Seoul, May 22. Korea Times file |
Chung to attend groundbreaking ceremony for EV plant in Georgia
By Lee Kyung-min
Hyundai Motor Group Chairman Chung Euisun left for the U.S., Monday, in a preemptive move to meet with policymakers with substantial influence in mapping out the specifics of the Inflation Reduction Act (IRA), according to market watchers, Tuesday.
His most pressing task is to buy time until after the car giant's Georgia manufacturing plants begin operating in 2025, about two years after beginning construction in the first half of next year. The groundbreaking ceremony was held Tuesday (local time).
This is the sixth U.S. visit of the head of the auto giant seeking to limit the fallout of the IRA whereby American buyers of electric vehicles (EVs) are denied tax credits of up to $7,500 (10.7 million won), for vehicles that have final assembly outside of North America.
No significant amendment to the IRA could tank the sales of Hyundai in North America, where it sold 244,000 vehicles in the third quarter of this year, up more than 30 percent from 187,000 the previous year. The figure is a notable feat given that domestic sales inched up only by 5 percent in the same period. The firm plans for the U.S. market to account for 28 percent of its global sales volume of 170,000 by 2030.
"The manufacturing plant in Georgia will begin production in early 2025," a Hyundai official said during a conference call, Monday. "We will solidify our standing in the U.S., where our market share is growing rapidly, as underpinned by flexibility in pricing and identifying sales channels, all outlined with market conditions not only for us but also our competitors."
Hyundai sold over 1.02 million vehicles in the global market in the third quarter, up 14 percent from the year before.
Operating sales came to 1.55 trillion won, despite over 1.36 billion won compensation for owners of vehicles with defective engines.
The carmaker will expand local investments, mostly by establishing manufacturing plants in Ulsan and Hwaseong, pushing up the annual manufacturing capacity to 1.44 million vehicles, up from the current 350,000.
The global sales of the IONIQ 6 will reach 15,000 this year, highly anticipated to generate popularity with consumers in European countries and North America. Next year's sales will be up 42 percent from 220,000, a goal set early this year. "The sales of the new IONIQ 6 will increase, lifted by the expansion of manufacturing plants within the country and abroad," the official said.
Whether the new model will continue the success of the IONIQ 5 remains to be seen. The IONIQ 5 won the World Car of the Year, World Electric Vehicle of the Year and World Car Design of the Year awards in 2022.
Eugene Investment & Securities analyst Lee Jae-il said the outlook for Hyundai is bright in the following quarter.
"The firm will register solid earnings in the fourth quarter, as underpinned by the low inventory of vehicles, soaring demand and sharp depreciation of the local currency against the dollar," he said in a report.
