Lee Min-hyung joined The Korea Times in 2014 and has worked as a journalist mainly in Korea’s finance, tech and automotive industry. He specializes in content creation, breaking news and in-depth analysis currently on transportation and mobility. You can reach him via mhlee@koreatimes.co.kr.
Munoz's sales success loses luster as Hyundai profits slide
Hyundai Motor CEO Jose Munoz listens to questions from reporters during a press conference at Conrad Seoul, Wednesday. Yonhap
By Lee Min-hyung
Falling margins, rising costs raise questions over his sales-driven strategy
The leadership of Hyundai Motor CEO Jose Munoz is facing a critical test, as the automaker struggles to turn its outward sales growth into sustainable profitability.
Munoz joined the carmaker in 2019 as president and global chief operating officer in charge of Hyundai Motor and Genesis in North America.
His performance in the region, where he oversaw consecutive sales records and improved profitability and market share, helped pave the way for his promotion to serve as the carmaker’s global CEO in January 2025 — the first non-Korean to lead the Korean automaker.
His appointment reflected Hyundai Motor Group Executive Chair Chung Euisun's push to bring in global talent and move Hyundai toward a more internationally oriented management structure, but the honeymoon period appears to be over.
Under his leadership, Hyundai Motor’s second-quarter sales reached a record 49.22 trillion won ($35.64 billion), up 1.9 percent from a year earlier.
Yet the headline growth masks a more troubling trend. Operating profit fell 20.8 percent to 2.85 trillion won, leaving the operating profit-to-sales ratio at just 5.8 percent, a sharp decline from 8.2 percent in the first quarter of 2025.
Korea Times graphic by Bae So-young
This means the firm’s profitability has deteriorated considerably, even as its sales have reached record levels.
The gap between sales growth and profit growth is becoming the central question surrounding his leadership.
"Munoz looks to focus too much on highlighting his sales achievement to consolidate his leadership, which draws backlash from some divisions within the carmaker, as his strategy of driving sales expansion, while tightening budgets has created operational bottlenecks," an official from the carmaker said.
The CEO has consistently emphasized scale and sales growth, while also pushing aggressive cost-control measures. At Hyundai's latest CEO Investor Day, the company raised its 2030 operating profit-to-sales ratio target to more than 9 percent.
“Munoz is well known in the auto industry for emphasizing cost-cutting,” said an official from the auto industry.
“However, there are obvious limits to how much profitability can be restored through cost reductions alone.”
Hyundai Motor CEO Jose Munoz speaks during the carmaker's 2026 CEO Investor Day in Seoul, Wednesday. Yonhap
That is particularly relevant, as Hyundai faces a structurally more expensive operating environment. The automaker is simultaneously investing heavily in electric vehicles (EVs), hybrids, extended-range EVs, software-defined vehicles, artificial intelligence and robotics while expanding production capacity around the world.
Those investments may strengthen Hyundai's competitive position over the long term, but they also make it more difficult to rely on cost reductions as the primary tool for protecting margins.
The U.S. market offers perhaps the clearest test of Munoz's record.
His strongest credential before becoming global CEO was his success in North America. Hyundai reached a historic 1 million U.S. auto sales in 2025, helped by strong SUV and hybrid demand.
Yet, tariffs exposed the limits of even that strong U.S. position. Hit by U.S. tariffs, Hyundai Motor’s 2025 operating profit fell 19.5 percent from a year earlier.
“It is difficult to say that Hyundai Motor Group employed a strategy that was clearly superior to its competitors in dealing with the tariff shock,” another industry source said.
“The 15 percent U.S. tariff the carmaker currently faces is similar to the burden faced by Hyundai's Japanese and European counterparts, so it is hard to say that Munoz deserves overwhelming credit for minimizing the damage.”
Hyundai has responded by accelerating U.S. localization, expanding hybrid production and raising its local parts-sourcing target to 80 percent by 2030. The measures could ultimately make the company less vulnerable to trade shocks, but they also require significant upfront investment.
His North American experience helped Hyundai build scale, improve its product mix and strengthen its position in the world's second-largest auto market, but the next stage requires more than selling more cars.
For Munoz, that may prove to be a much tougher assignment than building sales in North America.