Hyundai Mobis Q1 Sales Reach 11 Trillion Won... "Growth in Electrification Business"

Operating Profit and Net Income Decrease Year-on-Year... "Rising Raw Material Prices"
Growth in Electrification Segment Expected Due to Expansion of Eco-Friendly Vehicle Market from Q2 Onwards

[Asia Economy Reporter Hyunseok Yoo] Hyundai Mobis reported that its first-quarter sales increased by more than 15% year-on-year due to growth in the electrification business and increased demand for AS parts. However, operating profit and net profit declined due to rising raw material prices and transportation costs.

On the 22nd, Hyundai Mobis announced through a public disclosure that its first-quarter sales this year reached KRW 11.3082 trillion, operating profit KRW 386.9 billion, and net profit KRW 521 billion. Sales increased by 15.2% compared to the same period last year. However, operating profit and net profit decreased by 21.1% and 13.7%, respectively.

Due to issues such as automotive semiconductor supply shortages, finished vehicle volumes decreased. However, growth in the electrification sector and recovering demand for AS parts in the global market drove the sales increase. In fact, with the increase in eco-friendly vehicle production, Hyundai Mobis’s electrification business segment sales rose by 64% compared to the same period last year. AS parts sales in major overseas automotive markets such as North America and Europe also increased by more than 40%.

However, the unstable external environment has led to a contraction in the global automotive market, and the burden of rising raw material prices and transportation costs has directly impacted the decline in operating profit. Hyundai Mobis is making efforts to improve supply rates by switching the transportation method of urgently air-shipped parts overseas to air freight, among other measures.

Along with the increase in costs, despite the uncertain situation, the company increased its ordinary development expenses to secure future growth engines. A total of KRW 856.8 billion was spent on selling and administrative expenses, up 20.8% compared to the same period last year.

Hyundai Mobis expects positive changes to appear from the second quarter onward. As of the first quarter, the proportion of sports utility vehicle (SUV) models exceeded 50%, improving the product mix focused on high value-added parts, which is expected to contribute to stable performance going forward. Along with this, as the eco-friendly vehicle market expands, the electrification segment’s performance is also expected to steadily increase.

Orders for core parts from overseas finished car manufacturers other than Hyundai Motor and Kia are also rapidly increasing. Hyundai Mobis achieved core parts orders worth USD 1.66 billion in the first quarter alone, which is 44% of the annual plan, targeting global customers. This is the result of diversifying the global portfolio, including advanced markets in North America and Europe centered on advanced electronic parts, as well as emerging Chinese brands. Various order expansion strategies reflecting local market needs are expected to lead to additional achievements in the future.

A Hyundai Mobis official explained, "We expect semiconductor supply and global logistics environments to ease starting from the COVID-19 endemic phase. Accordingly, we plan to further strengthen efforts to diversify customers continuously, as well as to expand core parts orders and future technology markets."

This content was produced with the assistance of AI translation services.