Kia's sales performance clearly outpaced Hyundai Motor's; Goldman Sachs maintains Buy on Kia and Neutral on Hyundai Motor

Overview

This Goldman Sachs report updates Hyundai Motor and Kia's June, second-quarter, and year-to-date global wholesale sales, and compares the sales trends and investment ratings of the two companies. Overall, Hyundai Motor's sales came under year-over-year pressure, while Kia performed better in both domestic and overseas markets, with its recent sales advantage over Hyundai Motor particularly pronounced.

Core views

The core view is that Kia continues to offer better sales momentum and investment appeal relative to Hyundai Motor. Kia's advantages stem from a more suitable powertrain mix, a stronger model pipeline, demand for the Telluride HEV in the US, and European BEV lineup coverage spanning EV2 to EV9; accordingly, Goldman Sachs continues to emphasize Kia as a Buy. Although Hyundai Motor still has potential upside from foreign exchange, Boston Dynamics, and autonomous-driving execution, its current rating remains Neutral.

Analysis framework

The report primarily compares Hyundai Motor and Kia's performance in the South Korean domestic market and overseas markets using year-over-year and month-over-month changes in monthly, quarterly, and year-to-date wholesale sales, while incorporating the companies' 2026 wholesale sales guidance, model cycles, powertrain mix, and valuation multiples.

Methodology notes

• Valuation methodsTarget P/E multiple method

  Apply target P/E multiples based on 2027E-2028E EPS

  Hyundai Motor's 12-month target price of W600,000 is based on an 11.0x target P/E; Kia's 12-month target price of W240,000 is based on a 9.1x target P/E.

• Factor frameworkGS Factor Profile

  Integrated factors covering Growth, Financial Returns, Multiple, and Integrated

  Goldman Sachs compares individual stocks with the market and industry peers across growth, financial returns, valuation multiples, and integrated factors to provide investment context for equity research.

• M&A assessmentM&A Rank

  Classify companies into levels 1 through 3 according to their probability of being acquired

  M&A Rank 1 represents a relatively high probability of acquisition, 2 represents medium probability, and 3 represents low probability; when the rank is 1 or 2, an M&A component may be included in the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Kia (000270.KS)

  Key positive exposure

  Strengths

  Wholesale sales grew year over year in June, the second quarter, and year to date; stronger model pipeline; improving Telluride HEV performance in the US; relatively comprehensive European BEV lineup; valuation remains attractive relative to fundamentals.

  Weaknesses

  Still exposed to weakening automobile demand, cost inflation, and execution risks.

  Comparison

  Relative to Hyundai Motor, Kia's recent sales performance has been stronger, with better year-over-year performance in both domestic and overseas markets.

  Risks

  Cost inflation related to petrochemical products, weak underlying automobile demand, and slower-than-expected progress at Boston Dynamics or in HMG autonomous driving could lead to a valuation de-rating.

• Hyundai Motor (005380.KS)

  Neutral-rated exposure

  Strengths

  The target price remains based on 2027E-2028E EPS and an 11.0x target P/E; a weaker Korean won against the US dollar, deployment of Boston Dynamics' Atlas, or progress in HMG autonomous driving could provide upside.

  Weaknesses

  Wholesale sales declined year over year in June, the second quarter, and year to date, with a more pronounced decline in the domestic market.

  Comparison

  Relative to Kia, Hyundai Motor currently has weaker sales momentum and a lower rating.

  Risks

  Cost inflation, weak underlying sales demand, and slower-than-expected execution at Boston Dynamics or in HMG autonomous driving could lead to a valuation de-rating.

Key data

• Hyundai Motor June global wholesale338,313 units; +3.8% MoM; -5.9% YoYDomestic: 58,232 units, -6.2% YoY; overseas: 280,081 units, -5.8% YoY.
• Kia June global wholesale295,720 units; +6.3% MoM; +9.5% YoYDomestic: 54,508 units, +18.5% YoY; overseas: 240,259 units, +7.6% YoY.
• Hyundai Motor 2Q wholesale990,048 units; +1.4% QoQ; -7.1% YoYDomestic: 157,647 units, -16.4% YoY; overseas: 832,401 units, -5.1% YoY.
• Kia 2Q wholesale851,247 units; +9.2% QoQ; +4.5% YoYDomestic: 154,266 units, +8.6% YoY; overseas: 695,374 units, +3.5% YoY.
• Hyundai Motor year-to-date wholesale1,966,267 units; -4.9% YoYDomestic: 316,713 units, -10.8% YoY; overseas: 1,649,554 units, -3.7% YoY.
• Kia year-to-date wholesale1,630,988 units; +2.7% YoYDomestic: 295,779 units, +7.0% YoY; overseas: 1,332,473 units, +1.8% YoY.
• Hyundai Motor 2026 wholesale guidance+0.5% YoYThe domestic market is expected to decline 1.8% year over year, while the overseas market is expected to grow 1.0%.
• Kia 2026 wholesale guidance+6.8% YoYThe domestic market is expected to grow 3.4% year over year, while the overseas market is expected to grow 7.5%.

Impact & implications

The report's investment implication is that within the South Korean automobile sector, Kia's sales trend, model mix, and valuation attractiveness provide greater support for a positive view; Hyundai Motor remains Neutral because of its year-over-year sales decline and more balanced risk-reward profile. If Kia continues to gain share in HEV and BEV models, its relative valuation and earnings expectations could receive further support.

Risks

• Both Hyundai Motor and Kia face cost inflation risks.
• If underlying automobile demand is weaker than expected, sales and earnings performance will be pressured.
• Slower-than-expected progress at Boston Dynamics or in HMG autonomous driving could lead to a valuation de-rating.
• Kia also faces the impact of cost inflation related to petrochemical products.
• Foreign-exchange fluctuations could affect the earnings and valuation outlook for South Korean automakers.

What to watch

• The detailed regional sales breakdown released on July 2.
• Whether Kia's Telluride HEV continues to outperform the ICE version in the US market.
• Kia's share gains during Europe's BEV transition.
• Whether Hyundai Motor's full-year 2026 wholesale sales can approach the +0.5% YoY guidance.
• Whether Kia's full-year 2026 wholesale sales can achieve the +6.8% YoY guidance.
• The pace of Boston Dynamics Atlas deployment and HMG autonomous-driving progress.