By Heekyong Yang and Joyce Lee

SEOUL (Reuters) – Hyundai Motor Co said on Tuesday it expects sales in United States and China to surge this year, driven by the launch of new electric cars and sports utility vehicles (SUVs), after reporting its best quarterly profit in over three years.

Hyundai’s holiday-quarter profit jumped 57% on more demand for premium-margin SUVs, but overall sales volumes fell 5% amid a broader economic weakness due to the COVID-19 pandemic.

The promising outlook is a testament to Hyundai’s big electric vehicle (EV) push. The company, which together with affiliate Kia Corp is among the world’s top 10 automakers, is soon expected to introduce an EV-only platform that will use its own battery technology to cut time and costs.

Hyundai, however, did not provide on its earnings call any update on recently reported talks between it and Apple Inc about an electric car and battery tie-up.

On sales, the automaker said it expects a 12% jump in its biggest market, North America, in 2021. Its sales in the fourth quarter ended December slipped 2% in the region.

“With our lineup with new models ready to launch in the United States, we aim to increase our market share to 4.8% this year,” Senior Vice President Koo Za-yong said on the call.

Last year, the company managed to slightly advance its U.S. market share to 4.4%, helped by sales of the Palisade SUV and Kona EV, he said, despite a 10% fall in sales.

Analysts expect a boost to Hyundai’s EV sales this year despite a global recall of Kona Electric due to fires.

Hyundai said it expects sales to jump 28% in China, the world’s top car market where it also plans to release the electric version of its Mistra sedan this year.

“Last year, Hyundai basically didn’t do much in China, while other automakers launched new models as the Chinese auto market saw a rapid recovery amid the pandemic … Hyundai’s China strategy seems to focus on electric cars,” said Lee Han-joon, an analyst at KTB Investment & Securities.

Hyundai expects to sell 562,000 vehicles in China in 2021, and estimates sales in North America will jump to 909,000.

BEST QUARTER SINCE 2017

In the fourth quarter, Hyundai earned 1.3 trillion won ($1.18 billion), the highest since at least early 2017.

But it fell short of an average analyst estimate of 1.5 trillion won, compiled by Refinitiv, due to a strong won.

The South Korean currency rose about 7% against the dollar in the three months to December. A stronger won erodes the value of overseas sales for South Korean companies.

Hyundai shares, up more than a third this month led by news of the Apple tie-up, fell about 3% on Tuesday.

The broader KOSPI was down 2%.

Hyundai’s quarterly revenue rose 5% to 29.2 trillion won as it saw solid demand for its cars in the United States and emerging markets such as India despite the pandemic.

While demand for its vehicles from car-rental companies that purchase in bulk is still tepid, analysts said, sales of its luxury cars are expected to remain a bright spot.

Hyundai had delivered a loss in the October quarter as it provisioned for a big engine-quality related bill.

“Hyundai had a good fourth quarter, especially in the United States, where higher average-selling-price cars such as SUVs saw increasing demand as consumers shun public transit because of COVID-19 and low gasoline prices,” KTB’s Lee said.

“Holiday deals helped as well.”

(Reporting by Heekyong Yang and Joyce Lee; Editing by Sayantani Ghosh and Himani Sarkar)