Hyundai sees rebound of vehicle production in H1

“The normalisation of auto chip supply and demand is expected in the third quarter, when the capacity of semiconductor companies is expected to rise,” Executive VP Seo Gang Hyun said on Hyundai’s conference call.

The shortage will continue in the first quarter due to the spread of the Omicron variant, Seo said, adding it was the prolonged COVID-19 pandemic in Southeast Asia and resulting chip sourcing troubles that pushed Hyundai’s sales to less than the targeted 4 million vehicles in 2021.

Southeast Asia is central to the supply of basic chips that drive the world’s cars, smartphones and home devices, with Malaysia’s chip assembly industry accounting for more than a tenth of a global trade worth over $200 bn.

Hyundai said it expects a 20 pc sales jump in its biggest market, North America, in 2022.

Hyundai and its affiliate Kia Corp, together among the world’s top 10 automakers by sales, have forecast a 12.1 pc jump in their combined global sales for 2022, after their sales fell almost 4 percent short of a target of 6.92 million vehicles last year due to the chip shortages.

Hyundai posted a nearly 50 pc drop in its profit for the quarter ended December, significantly short of analysts’ estimate, mainly due to the payment of corporate taxes.

It reported a net profit of 547 billion won ($456 million), versus 1.1 trillion won a year earlier.