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Hyundai Q1 Profit Plunges 24% Amid US Tariffs, Rising Costs

Hyundai Motor reported a 23.6% year-on-year decline in first-quarter net profit, citing significant headwinds from US auto tariffs and rising material costs. Despite the profit drop, the results exceeded market expectations, aided by strong sales of high-value vehicles and hybrids. The automaker achieved a record quarterly high for hybrid electric vehicle sales, boosting its share of eco-friendly vehicles. Looking ahead, Hyundai anticipates a persistently challenging environment but plans to drive growth through new model launches and accelerated electrification.

Key Points: Hyundai Q1 Net Profit Down 24% on US Tariffs, Material Costs

  • Q1 net profit down 23.6%
  • US tariff costs at 860 billion won
  • Record quarterly hybrid vehicle sales
  • Global market share rises to 4.9%
  • Challenging outlook persists
2 min read

Hyundai Motor's Q1 net down 23.6 pc on US tariffs, rising material costs

Hyundai Motor's Q1 net profit fell 23.6% year-on-year, impacted by US auto tariffs and rising raw material costs, despite record hybrid sales.

"The company attributed the effects of U.S. auto tariffs, rising raw material costs and increased investment to the decline in profits. - Hyundai Motor"

Seoul, April 23

Hyundai Motor, South Korea's top automaker, said on Thursday 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.

Global wholesale sales for the company fell 2.5 percent on-year to 976,219 units, reflecting weaker overall market demand, though the company said it maintained relatively solid performance compared with other carmakers.

The automaker said stronger sales of high-value vehicles, particularly hybrids, and improved performance in its financial services business helped offset a decline in overall vehicle sales.

Hybrid electric vehicle (HEV) sales reached a record quarterly high of 173,977 units, while electric vehicle (EV) sales totalled 58,788 units. The share of eco-friendly vehicles in total sales climbed to 24.9 percent, with hybrids alone accounting for 17.8 percent, both marking record quarterly levels.

Hyundai Motor noted that its global market share rose to 4.9 percent from 4.6 percent a year earlier, while its share in the U.S. market increased to 6 percent from 5.6 percent.

Looking ahead, the company said it expects a challenging business environment to persist due to macroeconomic uncertainties, geopolitical risks and escalating trade tensions.

Hyundai Motor said it plans to drive growth through new model launches, expand its lineup of high-value vehicles and accelerate electrification efforts while adopting region-specific strategies.

The company also said it will strengthen companywide cost management and contingency planning to mitigate profitability pressures stemming from tariffs and other external factors.

- IANS

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Reader Comments

S
Sarah B
The silver lining is the record hybrid sales. This is the right strategy. In markets like India, full EVs still have range anxiety and charging issues. Strong hybrids like the Grand Vitara/Hyryder are a perfect bridge technology. Hope they bring more such models here.
R
Rohit P
Honestly, a 23.6% drop sounds bad, but they still made a profit of $1.7 billion! And it beat market estimates. Shows the company's resilience. Their market share is actually growing in the US and globally. This is more about external headwinds than poor management.
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Priyanka N
The focus on cost management is key. With rising material costs globally, it's a challenge for all automakers. Hyundai India needs to be careful with pricing. The Indian middle class is very price-sensitive. A small hike can push buyers towards Tata or Mahindra.
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Aman W
Geopolitical risks and trade tensions affecting a Korean company... makes you think. We rely so much on global supply chains. It's a reminder for India to strengthen its own manufacturing ecosystem under Make in India. Atmanirbhar Bharat is the need of the hour.
K
Kavya N
Respectfully, while the hybrid numbers are good, 58,788 EV units globally in a quarter seems low compared to some Chinese makers. They need to accelerate EV plans, especially for markets like India where the government is pushing for electric mobility. Hope the IONIQ 5 comes here soon!

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