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Hyundai Mobis Q1 Net Profit Drops 14% Amid Weak Global Vehicle Demand

Hyundai Mobis reported a 14% drop in Q1 net profit to 883 billion won due to weaker global vehicle demand and Middle East tensions. Operating profit rose 3.3% to 802.65 billion won, driven by increased supply of high-end electric components. The company plans to invest 2.1 trillion won in R&D this year, a 12% increase, to strengthen future mobility solutions. Hyundai Motor also saw a 23.6% drop in Q1 net profit, impacted by U.S. tariffs and rising raw material costs.

Key Points: Hyundai Mobis Q1 Net Profit Falls 14% on Weaker Demand

  • Hyundai Mobis Q1 net profit fell 14% to 883 billion won
  • Operating profit rose 3.3% on high-end EV components
  • Company plans 2.1 trillion won R&D investment, up 12%
  • Hyundai Motor Q1 net profit dropped 23.6% on U.S. tariffs
2 min read

Hyundai Mobis Q1 net profit falls 14 pc on weaker vehicle demand

Hyundai Mobis Q1 net profit fell 14% to 883 billion won due to weaker global vehicle demand and Middle East tensions. Operating profit rose 3.3% on EV components.

"Rising external uncertainties linked to prolonged tensions in the Middle East dampened vehicle sales and parts demand - Hyundai Mobis official via Yonhap"

Seoul, April 24

Hyundai Mobis, South Korea's leading auto parts maker, said on Friday its first-quarter net profit fell 14 per cent from a year earlier as weaker global vehicle demand weighed on earnings.

Net profit for the three months ending in March fell to 883.05 billion won ($596 million) from 1.03 trillion won a year earlier, the company said in a regulatory filing.

"Rising external uncertainties linked to prolonged tensions in the Middle East dampened vehicle sales and parts demand," a company official said, reports Yonhap news agency.

Operating profit rose 3.3 percent to 802.65 billion won from 776.68 billion won during the same period on increased supply of high-end electric components to global carmakers. Sales climbed 5.5 percent to 15.56 trillion won from 14.75 trillion won.

Despite ongoing uncertainties, Hyundai Mobis said it plans to invest 2.1 trillion won in research and development (R&D) this year to strengthen its competitiveness in future mobility solutions.

The planned R&D spending marks a 12 percent increase from a year earlier.

Hyundai Mobis generates about 90 percent of its parts sales from affiliates Hyundai Motor Co. and Kia Corp. The company aims to raise the share of overseas parts sales from 10 percent to 40 percent by 2033. It also holds a 21.86 percent stake in Hyundai Motor.

Earlier, Hyundai Motor said its first-quarter net profit dropped 23.6 percent on-year amid business environment headwinds involving U.S. tariffs and rising raw material costs.

Net profit for the first three months of this year totalled 2.58 trillion won ($1.7 billion), down from 3.38 trillion won a year ago, the company said in a regulatory filing.

Operating income for the January-March period fell 30.8 percent on-year to 2.51 trillion won, but sales increased 3.4 percent to 45.93 trillion won, reports Yonhap news agency.

Despite the drop in profits, the figure exceeded market expectations. The average estimate of net profit by analysts stood at 2.43 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company attributed the effects of U.S. auto tariffs, rising raw material costs and increased investment to the decline in profits. Tariff-related costs amounted to 860 billion won during the quarter, according to Hyundai.

- IANS

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Reader Comments

S
Sarah B
The R&D investment increase is impressive - 12% more to 2.1 trillion won. That shows they're thinking long-term despite short-term profit dips. I hope Indian companies take note; we need more investment in future mobility like EVs and autonomous driving tech instead of just assembling parts.
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Michael C
Net profit down 14% is no small thing. The market is getting really competitive with Chinese manufacturers offering cheaper alternatives. But Hyundai Mobis is still well-positioned with their EV component business growing. For India, we should watch how they navigate these tariff issues with the US - could be a model for our exporters.
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Priya S
The fact that operating profit actually rose 3.3% despite all the headwinds shows good cost management. But I wonder how much of this is due to higher-priced EV components vs genuine efficiency gains. Indian auto suppliers should note: diversification into high-end electronics seems to be paying off for them. 🔋
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David E
Honestly, a bit worried about how much Hyundai Mobis relies on Hyundai and Kia - 90% of parts sales from just two affiliates. That's a huge concentration risk. Their plan to diversify to 40% overseas sales by 2033 is good but that's 10 years away. Indian companies should avoid putting all eggs in one basket too.

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