Hyundai Motor Co., South Korea’s leading automaker, said Thursday its first-quarter net profit slipped 1.3 percent on-year amid a slowdown in sales due to a temporary shutdown of one of its Korean manufacturing plants.
Net profit for the January-March period came to 3.37 trillion won (US$2.5 billion) on a consolidated basis, compared with a profit of 3.41 trillion won a year ago, the company said in a regulatory filing.
Operating profit reached 3.55 trillion won, down 2.3 percent from a year ago. Sales rose 7.6 percent to a record 40.65 trillion won.
The company’s quarterly performance beat market expectations. The average estimate of net profit by analysts stood at 3.03 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Hyundai Motor said it sold 1,006,767 vehicles globally in the first quarter of 2024, down 1.5 percent from the same period last year.
The company attributed the slowdown in sales to the temporary shutdown of production lines at its Asan
plant in South Korea, carried out as part of Hyundai’s upcoming new car launch preparations.
At home, the company’s sales fell 16.3 percent on-year to 159,967 units, but its overseas sales rose 1.9 percent to 846,800 units thanks to the introduction of new models and strengthened demand in North America, Europe and India.
Sales of Hyundai’s eco-friendly vehicles fell 4.8 percent to 153,519 units, reflecting the recent slowdown of global electric vehicle (EV) demand.
“Despite ongoing uncertainties in the business environment due to persisting high interest rates and geopolitical risks emanating from the Middle East, as well as increased exchange rate volatility, Hyundai has maintained a stable profitability of over 8 percent thanks to sustained sales growth in major overseas markets,” a company official said.
Lee Seung-jo, senior vice president and head of Hyundai’s planning and finance division, said in a conference call that the company plans to invest in facilities to convert Hyundai Motor Group Metapl
ant America, a dedicated EV plant currently under construction in the U.S. state of Georgia, to be capable of producing hybrid models as well.
“Besides EV, there is an increasing trend of hybrid vehicle production, and we will add additional facilities to respond to demand of hybrids,” Lee said.
Hyundai anticipated that higher costs from increasing competition would pose a potential risk factor for future business operations. Additionally, it anticipated continued unpredictability due to the escalating geopolitical risks and increasing macroeconomic uncertainties in emerging markets.
The South Korean company said it plans to focus on enhancing sales of eco-friendly cars through the expansion of its Ioniq EV lineup and that of other hybrid models.
It will also aim to maximize sales by optimizing its production pipeline and expand its market share by improving its mix of product categories centered around SUVs and premium models.
Source: Yonhap News Agency