HMC and Kia's combined U.S. market share rose to 11.8% in May, with a notable increase in HEV share

Overview

This report tracks Korean automakers Hyundai Motor and Kia in the U.S. May market in terms of sales, market share, HEV/BEV performance, and per-unit incentives. The core conclusion is that the two companies' combined market share in the U.S. continues to improve, with HEV demand and share growth particularly strong; however, Hyundai Motor maintains a Neutral view while Kia maintains a Buy view, and investors still need to monitor FX, production disruptions, market share in Europe and other regions, and autonomous driving/robotics execution progress.

Core views

In May, HMC and Kia U.S. sales were 94,358 units and 80,502 units, respectively, both outperforming the overall industry's YoY growth rate; the two companies' combined market share reached 11.8%, and Goldman Sachs expects it to rise to 12.0% by the end of 2026 with help from new model refreshes in 2H26. HEV was the key highlight, with HMC and Kia HEV sales up 90.1% and 179.4% YoY, respectively, bringing combined HEV market share to 19.9%. At the same time, per-unit incentives rose YoY, indicating competition and price support still need monitoring.

Analysis framework

The report is based on U.S. monthly sales data published by Motor Intelligence, comparing HMC, Kia, and the overall U.S. industry in terms of sales, MoM, YoY, and market share changes, and further breaking down HEV and BEV demand, brand HEV penetration, incentive spending, and alignment with 2026 sales guidance. The valuation section derives 12-month target prices using 2027E EPS and target P/E multiples.

Methodology notes

• Monthly operating trackingU.S. sales and market share tracking

  Measure U.S. market momentum using sales, industry demand, and market share changes

  The report compares MoM and YoY changes in May sales for HMC, Kia, and the U.S. industry, and tracks year-to-date sales progress relative to 2026 company guidance.

• Valuation methodsTarget P/E multiple method

  Derive the 12-month target price by multiplying 2027E EPS by the target P/E multiple

  Hyundai Motor's target price of W500,000 is based on a 10.0x target P/E; Kia's target price of W218,000 is based on a 9.1x target P/E, with Kia's multiple 9% lower than HMC's.

• Multi-factor profileGS Factor Profile

  Compare stock attributes across growth, financial returns, valuation multiples, and composite indicators

  Goldman Sachs Factor Profile uses analyst forecasts and standardized rankings to convert growth, financial returns, and valuation multiples into percentiles, helping compare stocks against the market and industry peers.

• M&A probability frameworkM&A Rank

  Use ratings from 1 to 3 to indicate the probability of a company becoming an acquisition target

  Goldman Sachs disclosures state that M&A Rank 1 represents a higher probability of acquisition, 2 represents a medium probability, and 3 represents a lower probability; this framework may affect the target price composition of some companies.

Asset mapping & comparison

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

• Hyundai Motor

  Korean automaker; the report tracks its U.S. sales, market share, HEV performance, target price, and risks.

  Strengths

  May U.S. sales +3.4% YoY, above the industry's +0.4% YoY; U.S. market share rose to 6.4%; HEV sales +90.1% YoY, with HEV market share at 10.0%.

  Weaknesses

  Goldman Sachs rating is Neutral; per-unit incentives +16.8% YoY; valuation and earnings are still affected by FX, production disruptions, and execution of new businesses.

  Comparison

  HMC's total market share of 6.4% is higher than Kia's 5.4%, and its HEV market share of 10.0% is slightly higher than Kia's 9.9%, but Kia's HEV YoY growth rate and HEV sales mix are higher.

  Risks

  Middle East conflict leading to production disruptions; slower-than-expected Boston Dynamics Atlas deployment or HMG autonomous driving progress could lead to valuation cuts; if KRW remains weaker, there may be upside to earnings forecasts.

• Kia

  Korean automaker; the report tracks its U.S. sales, market share, HEV performance, target price, and risks.

  Strengths

  May U.S. sales +1.9% YoY; HEV sales +179.4% YoY; HEV accounted for 31.5% of total sales; Goldman Sachs assigns a Buy rating and a 12-month target price of W218,000.

  Weaknesses

  Total U.S. market share of 5.4% is lower than HMC; per-unit incentives +26.4% YoY; continued share losses in Europe and other regions could weigh on operating profit.

  Comparison

  Kia's total market share is lower than HMC's, but its HEV sales mix is higher and HEV YoY growth is also significantly faster than HMC's; its target P/E is 9.1x, 9% lower than HMC's target multiple.

  Risks

  Every 1% appreciation of KRW against USD would impact Kia by about W190bn; Middle East conflict could cause production disruptions; continued share losses in Europe/RoW could bring 5%-9% downside risk to operating profit; slower-than-expected BD or HMG autonomous driving execution could lead to valuation cuts.

• U.S. HEV market

  The powertrain sub-segment with the most prominent growth driver for HMC and Kia.

  Strengths

  May U.S. HEV demand +32.5% YoY, with HMC and Kia combined HEV market share up 8.3 percentage points YoY to 19.9%.

  Weaknesses

  Sustained high HEV growth requires continued dependence on product supply, model refreshes, and incentive management.

  Comparison

  HEV is clearly stronger than BEV, whose May U.S. demand was -19.8% YoY.

  Risks

  If consumer demand, the policy environment, or competitor supply changes, HEV growth and market share improvement may slow.

Key data

• May U.S. industry demand1,479,626 units+7.2% MoM, +0.4% YoY.
• HMC May U.S. sales94,358 units+9.1% MoM, +3.4% YoY; year-to-date U.S. retail sales +1.1%.
• Kia May U.S. sales80,502 units+10.7% MoM, +1.9% YoY; year-to-date U.S. retail sales +2.1%.
• May U.S. market shareHMC 6.4%, Kia 5.4%, combined 11.8%Combined market share +0.3 percentage points MoM and +0.3 percentage points YoY; Goldman Sachs expects 12.0% by end-2026.
• U.S. HEV demand255,645 units+14.4% MoM, +32.5% YoY; significantly stronger than BEV.
• U.S. BEV demand86,495 units+10.3% MoM, -19.8% YoY.
• HMC and Kia HEV salesHMC 25,559 units; Kia 25,392 unitsHMC +90.1% YoY, Kia +179.4% YoY.
• May HEV market shareHMC 10.0%, Kia 9.9%, combined 19.9%Combined HEV market share +1.8 percentage points MoM and +8.3 percentage points YoY.
• HEV share of total brand salesHMC 27.1%; Kia 31.5%Kia's HEV sales mix is higher than HMC's.
• May per-unit incentivesHMC $3,330; Kia $3,440; industry average $3,502HMC +16.8% YoY, Kia +26.4% YoY, industry average +5.6% YoY.
• 2026 sales guidance comparisonHMC North America wholesale +0.5%; Kia U.S. retail +4.7%The report compares year-to-date performance with the companies' 2026 guidance.
• Target price and ratingHyundai Motor W500,000/Neutral; Kia W218,000/BuyBoth are 12-month target prices, based on 10.0x and 9.1x target P/E on 2027E EPS, respectively.

Impact & implications

The increase in U.S. market share and strong HEV growth support continued improvement in HMC and Kia's competitive position in the U.S. in 2026, especially helping deliver market share targets after new model refreshes in 2H26. Kia shows a more positive equity mapping due to its Buy rating and higher HEV penetration; although Hyundai Motor's fundamentals have improved, Goldman Sachs still assigns it a Neutral rating. Rising incentives, KRW-USD volatility, potential production disruptions, and execution progress in autonomous driving/robotics businesses are key variables affecting earnings and valuation re-rating.

Risks

• If the Middle East conflict is prolonged, it may lead to potential production disruptions.
• KRW/USD exchange rate volatility will affect earnings; for Kia, every 1% appreciation of KRW against USD impacts earnings by about W190bn.
• Slower-than-expected Boston Dynamics Atlas deployment or HMG autonomous driving progress could lead to valuation cuts.
• If Kia continues to lose significant market share in Europe and other regions, it could create 5%-9% downside risk to operating profit.
• Per-unit incentives rose YoY; if competition intensifies, margins may be pressured or the benefit of sales growth may be offset.
• The report discloses that Goldman Sachs has or expects to have investment banking and client relationships with Hyundai Motor and Kia; when using the research conclusions, potential conflicts of interest should be understood together with the disclosure page.

What to watch

• Whether HMC and Kia's combined U.S. market share can reach Goldman Sachs' expected 12.0% by the end of 2026.
• The impact of 2H26 new model refreshes on U.S. sales, market share, and HEV penetration.
• Whether HEV demand continues to significantly outperform BEV, and whether HMC/Kia can maintain combined HEV share near 20%.
• Changes in HMC and Kia per-unit incentives relative to the industry average, especially whether Kia's sharp YoY increase in incentives affects margins.
• Gap between year-to-date sales and 2026 guidance: HMC North America wholesale +0.5%, Kia U.S. retail +4.7%.
• KRW-USD exchange rate, Middle East geopolitical risks, Boston Dynamics Atlas deployment, and HMG autonomous driving progress.