The Korea Herald


Hyundai Motor posts record Q3 earnings on upbeat US sales

By Byun Hye-jin

Published : Oct. 26, 2023 - 18:15

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Hyundai Motor Group’s headquarters in Yangjae, Seocho-gu, Seoul (Hyundai Motor Group) Hyundai Motor Group’s headquarters in Yangjae, Seocho-gu, Seoul (Hyundai Motor Group)

Hyundai Motor Group said Thursday it hit record earnings in the third quarter thanks to all-time high sales in the US market.

The company’s operating profit from July to September skyrocketed 146.3 percent from last year to 3.8 trillion won ($2.8 billion), its highest figure since 2011. Its sales revenue increased 8.7 percent to 41 trillion won in the same period.

The world’s third-largest carmaker sold a total of 1.04 million cars abroad and within Korea, a 2 percent jump from a year ago in the third quarter. It marks its second-highest number in the last five years, according to the company.

US sales, in particular, jumped 27 percent with the value-added car lineups – sport utility vehicles like the Tucson, Palisade and Kona – and the premium Genesis brand, according to Yoon Tae-sik, head of the investor relations team at Hyundai Motor Group.

Stressing that US business witnessed its highest-ever sales, Seo Gang-hyun, chief financial officer at Hyundai Motor Group, said Europe and India led the sales boost as well. Europe has shown strong demand for the new Kona EV and hybrid cars, while Hyundai’s micro-SUV Exter, which was launched in July, led the India sales.

Its domestic sales rose 3 percent from a year earlier, driven by the new Kona and Santa Fe SUVs along with hybrid cars.

In addition to worldwide sales growth, Seo said SUV models and Genesis cars made up around 60 percent of total sales in the third quarter, improving the product mix with highly profitable vehicles.

Despite concerns about sluggish EV demand, electric car sales jumped 26.1 percent from a year earlier, as battery-powered and hybrid cars took up 6.3 percent and 8.6 percent, respectively.

For this year’s earnings outlook, Seo said, “The company is likely to hit the upper band of the annual guidance – 15 percent growth in sales and 9 percent operating profit margin. Although there are global macroeconomic uncertainties, we plan to make a decision-making process focusing on profitability and anticipated demands from different regions.”

Highlighting the all-important US market, the automaker expects a continuous upward trend for SUV sales there, with the new Santa Fe debut next year. It has worked with its local design centers during the early stage of product development to cater to the needs of the US customers, according to Seo.

“We’re also striving to improve and expand local dealerships under the ‘bigger the better strategy,’” said Seo. “The company is providing subsidies to dealers, who play a key role in tapping US customers.”

As for the recent settlement between Ford Motor Co. and the US United Auto Workers on a 25 percent wage increase, Seo said, “Hyundai’s Alabama plant workers are not part of the union, however, we plan to have negotiations considering the fact that the company already increased the wage.”

Even though EV markets are seeing signs of demand slowing down, Hyundai plans to stick to its plan to meet a sales target of 3.6 million units by 2030. Its EV manufacturing plant in the US state of Georgia is expected to complete construction and start production in late 2024 as planned.

“Sales targets for next year could be adjusted depending on the market situation. But we will not drastically cut the production volume or delay the development of new electric cars,” Seo said.