Hyundai Motor Q2 Revenue Hits Record High, Operating Profit Exceeds Expectations

On July 24th, Hyundai Motor announced that in the second quarter of this year, thanks to strong sales of its hybrid vehicles in the North American market, its revenue increased by 7.3% year-on-year to 48,287 billion Korean won (approximately 35.26 billion USD), a record high. However, due to the impact of U.S. tariffs on imported cars, operating profit fell by 15.8% year-on-year to 3,602 billion Korean won, but it was still slightly above Bloomberg's median forecast (3.5 trillion Korean won). Net profit declined by 22.1% year-on-year to 3,250 billion Korean won.

Image source: Hyundai Motor Company

Hyundai Motor said in a statement: "Increased incentives due to intensified industry competition, as well as the impact of the global trade environment, have put pressure on its operating profit." In its earnings conference call, Hyundai revealed that U.S. tariff policies reduced its operating profit by 828 billion won in the second quarter of this year.

Seung Jo Lee, Executive Vice President and Chief Financial Officer of Hyundai Motor Company, pointed out during a report to investors that although strong sales of hybrid and electric vehicles in North America drove the company’s record quarterly revenue, tariff policies will have a more significant impact on the company’s operations starting from the third quarter of this year.

When discussing the US market strategy, Seung Jo Lee stated that Hyundai Motor is committed to simultaneously increasing its market share and profitability in the United States. However, regarding whether to adjust car prices in the US market and when to make such adjustments, the company has not yet made a final decision and will closely monitor changes in market dynamics.

Meanwhile, Hyundai Motor announced that its global sales for the second quarter of this year reached 1,065,836 units, a slight increase of 0.8% year-on-year. Among these, sales outside of Korea saw a slight year-on-year increase of 0.7% to 877,296 units, mainly due to strong demand in the North American market (sales increased by 3.3% year-on-year). This growth is primarily attributed to the strong sales of key models such as the TUCSON and SANTA FE SUVs, as well as the ELANTRA sedan (known as "Avante" in some markets).

In the domestic South Korean market, Hyundai Motor's sales in the second quarter of this year increased by 1.5% year-on-year to 188,540 units, mainly due to the launch of new models such as the PALISADE SUV and IONIQ 9 SUV.

Notably, Hyundai Motor's global sales of electrified vehicles in the second quarter of this year increased significantly by 36.4% year-on-year, reaching 262,126 units; among them, the company's hybrid models performed exceptionally well, setting a record high with sales of 168,703 units, up 38.5% year-on-year. The significant growth in the company's electric vehicle sales in the European market also contributed to the overall increase in its total sales.

The release of the above financial report coincides with a new round of consultations in Washington, D.C., involving senior South Korean officials in finance, trade, and security. Currently, South Korea is negotiating with the United States to lower tariff rates, but the two sides have yet to reach an agreement before the upcoming August 1 deadline.

According to the latest tariff plan, the United States intends to raise the tariff rate on South Korean goods from the current 10% to 25%, while maintaining the original tariffs on specific sectors such as imported automobiles, steel, and aluminum products. As an important ally of the United States in the Asia-Pacific region and a significant base for industries such as automotive, semiconductors, and batteries, South Korea has proposed a "mutually beneficial" manufacturing partnership initiative aimed at strengthening the industrial supply chains between China and South Korea. The South Korean side emphasizes that any final agreement must include clauses to abolish or limit tariffs on products such as automobiles and steel.

Additionally, it is worth noting that just one day before the release of the aforementioned financial report, the United States reached a trade agreement with Japan. It is reported that the U.S. will reduce tariffs on Japanese-made cars to 15%, and this measure may weaken Hyundai's price competitiveness in the U.S. market.