Hyundai Motor achieves record Q3 sales despite EV chasm
Hyundai Motor's logo is displayed at a dealership in Seoul, Thursday. Yonhap
Hyundai Motor posted a record-high revenue in the third quarter, defying the ongoing slowdown in the global demand for electric vehicles (EVs) with solid sales of hybrid vehicles.
The carmaker said Thursday it recorded 42.93 trillion won ($31.1 billion) in sales during the July-to-September period, up 4.7 percent from a year earlier. It is the highest third-quarter revenue in the company’s history.
During the same period, its operating profit stood at 3.58 trillion won, down 6.5 percent year-on-year.
The sales were higher than the market consensus of 42.84 trillion won, but the operating profit was slightly below projections, reaching 3.8 trillion won instead of the anticipated 3.87 trillion won.
“The year-on-year revenue growth was attributed to an increase in our average selling price, driven by expanded sales of hybrid vehicles and other high-value models,” the company said. “However, operating profit saw a slight decline compared to the same period last year, due primarily to provisions related to the proactive warranty extension in North America. Excluding this factor, the results were in line with market expectations.”
In the third quarter, Hyundai Motor delivered a total of 1.01 million vehicles, down 3.2 percent from 1.04 million vehicles a year earlier, due to the slowdown in the global market and expanded geopolitical risks.
Hyundai Motor's Santa Fe / Courtesy of Hyundai Motor
Despite the downside pressures, the company defied the ongoing slowdown in global EV demand and posted record-high third-quarter sales by boosting the sales of its high-value vehicles.
According to the company, Hyundai Motor delivered 201,849 eco-friendly vehicles in the third quarter, up 19.5 percent from a year earlier. During the period, the sales of EVs declined by 7.58 percent to 61,000 vehicles, but hybrid EV sales grew 43.96 percent to 131,000.
“However, hybrid vehicles have been complementing the weakening EV demand,” the company said during a conference call. “The growth in hybrid sales was not limited to specific regions but expanded significantly across all markets, including domestic, U.S., European and other regions.”
Despite the protracted slowdown in EV demand, the company said its plan for manufacturing EVs at its plant in the U.S. state of Georgia remains intact. During the conference call, the company noted that Hyundai Motor Group Metaplant America, the company’s first dedicated EV mass production plant, began operations on Oct. 3.
“Since we are currently in the ramp-up phase, the production volume is not yet significant,” the company said. “We are increasing the pace gradually to normalize the plant's operating rate, and production is now actively underway.”
The company expects that it will be able to keep its promise of achieving an operating margin of 8 percent to 9 percent by the end of this year, but the surrounding environment is becoming more challenging.
Hyundai Motor said that it anticipates protracted challenges in its business environment due to slowing growth rates in major markets, exchange rates, increased economic uncertainty from potential interest rate cuts and heightened geopolitical risks in the Middle East and Ukraine.
In response, Hyundai Motor said it is preparing detailed strategies for each business unit to enhance their competitiveness. For this, the company said it will focus on strengthening risk management capabilities, ensuring quality, improving cost efficiency, optimizing sales and improving both internal and external communications.
“As competition intensifies among major carmakers due to declining global demand, Hyundai Motor has been steadily improving its operational fundamentals to strengthen its resilience,” a company official said.