Hyundai Motor 3Q Operating Profit 3.6 Trillion Won... 6.5% Decrease YoY (Update)

Sales 42.9 Trillion KRW, Up 4.7% YoY... Profit Margin 8.3%
"3.2 Trillion KRW Warranty Extension Provision Reflected in North America"

Hyundai Motor Company announced on the 24th that its consolidated operating profit for the third quarter of this year was 3.5809 trillion KRW, a 6.5% decrease compared to the same period last year.

Sales revenue increased by 4.7% to 42.9283 trillion KRW during the same period. The operating profit margin fell by 1 percentage point to 8.3% compared to the same period last year. Net profit for the period decreased by 3.0% to 3.2059 trillion KRW. Global sales volume in the third quarter was 1,011,808 units (wholesale basis), down 3.2% from the third quarter of last year.

The company explained that the decline in operating profit, contrary to initial market expectations, was due to the recognition of a provision of approximately 320 billion KRW related to extended warranties for sport utility vehicles (SUVs) in the North American region.

Although total sales volume decreased, sales revenue increased due to a higher proportion of hybrid and high-end vehicle sales and favorable exchange rates. The company stated, "Operating profit slightly decreased due to the provision, but excluding this, the results are in line with market expectations."

Domestic sales volume was 169,901 units, up 1.8% from the same period last year. Overseas sales were 841,907 units, down 4.2% during the same period. Sales in the North American region, which accounts for the largest share, increased by 9.3% to 300,319 units, but sales declined in most other regions including China and Europe. In the eco-friendly vehicle segment, sales centered on hybrids increased to a total of 201,849 units, a 19.5% increase compared to the same period last year.

With growth rates slowing in key markets, declining exchange rates, and increasing macroeconomic uncertainties, the company anticipates an unfavorable business environment. To respond, Hyundai plans to enhance risk management capabilities by early identification of changes in related policies and regulations in major markets and making swift decisions. From a quality management perspective, the company will advance the existing quality completion system (HIVIS) and improve hardware and software quality competitiveness.

Hyundai Motor Company building in Yangjae-dong, Seoul. Photo by Jinhyung Kang aymsdream@

Cost reduction was also emphasized. The company said, "We will actively eliminate inefficiencies and waste throughout the entire product lifecycle," adding, "In the electric vehicle sector, we will improve the cost of key components and enhance price competitiveness by equipping various battery types."

Hyundai plans to maintain sales volume centered on hybrid vehicles, which are seeing increasing global demand. The company aims to continue the sales growth trend by steadily introducing new models. In the United States, the operation of a new plant is expected to enhance competitiveness in electric vehicles. To achieve results in new business areas, Hyundai recognizes the importance of a system and culture that enable bold thinking and plans to promote internal innovation including organizational culture.

The dividend for the third quarter of this year was 2,000 KRW, maintaining the same level as in the first and second quarters. This is an increase of 500 KRW per share compared to the same period last year.

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