Hyundai Motor’s Q1 net profit down as sales drop over plant suspension

Hyundai Motor said on Thursday that its first-quarter net profit slipped 1.3 per cent (year-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 ($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 per cent to a record 40.65 trillion won.

Hyundai Motor said it sold 1,006,767 vehicles globally in the first quarter of 2024, down 1.5 per cent from the same period last year.

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.

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.

Sales of Hyundai’s eco-friendly vehicles fell 4.8 per cent 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.

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.