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MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  Hyundai Motor Company    A005380   KR7005380001

HYUNDAI MOTOR COMPANY

(A005380)
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Rental fleet collapse drags down U.S. vehicle sales

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06/02/2020 | 06:03pm EDT
FILE PHOTO: Unused rental cars fill the Dodger Stadium parking lot as the spread of the coronavirus disease (COVID-19) continues, in Los Angeles

By Rachit Vats

The collapse in demand for new vehicles from U.S. rental car fleets hit automakers hard in May, even as consumer sales were stronger than expected as coronavirus stay-at-home orders began to ease.

The collapse of air travel has pushed big car rental companies to cancel orders for new vehicles, punching a hole in sales for nearly a dozen U.S. automakers' including the Big Three in Detroit.

Hyundai Motor Co's U.S. sales arm said Tuesday that its sales to fleets, including rental companies, fell by 79% in May, while retail sales grew by 5%.

Automakers could lose up to 12% of their annual U.S. vehicle sales in 2020 as car rental companies slammed by the coronavirus pandemic slash fleets and restructure, according to Jefferies.

The retreat by rental car companies threatens production and jobs at U.S. factories that build vehicles popular with rental car fleets such as Hertz Global Holdings Inc, which filed for bankruptcy protection late last month.

Hertz has said it negotiated with U.S. manufacturers to cancel about 90% of its remaining 2020 fleet orders and has no plans to purchase new rental vehicles for the U.S. fleet. Likewise, Avis said it disposed of 35,000 cars in May and canceled 80% of its incoming rental vehicle orders in the U.S. for the rest of the year.

Click here to view an interactive graphic https://fingfx.thomsonreuters.com/gfx/editorcharts/rlgpdkjnrvo/index.html

"At least 80% of new purchases stand canceled post COVID-19," said Hamzah Mazari, a Jefferies analyst. He predicts corporate travel won't recover until 2022 "at the earliest."

In 2019 alone, listed rental companies Hertz and rival Avis Budget Group Inc together purchased about 970,000 vehicles, from about a dozen automakers, down about 2.4% from a year ago, according to Jefferies.

The global pandemic hit rental fleet sales hard in April, pushing them down 77%, or about 108,000 vehicles, according to Cox Automotive. Retail sales were off 41%, or just over 400,000 units. For May, the consultancy expects sales to be down about 33% versus May 2019.

IHS, which closely tracks automotive sales and production trends, said it expects global light vehicle sales to fall 22% to 70.3 million units in 2020, from prior estimates of a more than 12% drop.

(Reporting by Rachit Vats in Bengaluru. Additional reporting by Nick Carey in Iowa and Joseph White in Detroit; Editing by Nick Zieminski)

Stocks mentioned in the article
ChangeLast1st jan.
AT HOME GROUP INC. 2.76% 5.96 Delayed Quote.8.36%
AVIS BUDGET GROUP, INC. 4.47% 28.04 Delayed Quote.-13.03%
FIAT CHRYSLER AUTOMOBILES N.V. 2.34% 8.833 Delayed Quote.-33.05%
HERTZ GLOBAL HOLDINGS, INC. 0.00% 1.45 Delayed Quote.-90.79%
HYUNDAI CORPORATION 2.14% 14300 End-of-day quote.-20.11%
HYUNDAI MOTOR COMPANY -1.31% 98300 End-of-day quote.-18.42%
JUST GROUP PLC 2.25% 49.06 Delayed Quote.-37.90%
LETS HOLDINGS GROUP CO., LTD. -1.85% 11.64 End-of-day quote.92.72%
LOOK HOLDINGS INCORPORATED -2.42% 685 End-of-day quote.-45.29%
THE GLOBAL LTD. -3.30% 205 End-of-day quote.-56.48%
WILL GROUP, INC. -2.52% 618 End-of-day quote.-50.64%
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Financials
Sales 2020 100 717 B 83,9 B 83,9 B
Net income 2020 2 516 B 2,10 B 2,10 B
Net Debt 2020 56 664 B 47,2 B 47,2 B
P/E ratio 2020 9,68x
Yield 2020 3,99%
Capitalization 20 925 B 17 431 M 17 430 M
EV / Sales 2019
EV / Sales 2020 208x
Nbr of Employees -
Free-Float 71,0%
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Number of Analysts 26
Average target price 131 346,15 KRW
Last Close Price 98 300,00 KRW
Spread / Highest target 72,9%
Spread / Average Target 33,6%
Spread / Lowest Target 9,87%
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NameTitle
Mong-Koo Chung Chairman & Co-Chief Executive Officer
Won-Hui Lee Co-President, Co-CEO & Director
José Munoz Global Chief Operating Officer
Byeong-Cheol Choi Chief Financial Officer
Moon-Sik Kwon Vice Chairman-Executive Board, Head-R&D
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