Hyundai Motor Reports 3% Decline in Q3 Net Profit Amid Rising Costs and Incentives

Seoul: South Korea's automotive giant, Hyundai Motor Co., announced a 3 percent drop in its net profit for the third quarter, attributing the decline to increased incentives and costs in global markets. According to Yonhap News Agency, Hyundai's net profit for the three-month period ending in September fell to 3.206 trillion won (approximately US$2.3 billion), down from 3.303 trillion won during the same period last year. The company cited increased incentives in the European and U.S. markets, along with higher costs associated with preemptive warranty extensions for the Grand Santa Fe SUV in the U.S., as key factors impacting the quarterly results. Looking forward, Hyundai anticipates challenging market conditions will persist, driven by factors such as decreased demand, stricter emissions standards, and heightened competition. These challenges are expected to continue influencing incentives and other costs in the upcoming fourth quarter. In an earnings conference call, Hyundai Motor Senior Vice President Lee Seung-jo emphasized the company's strategy to navigate these uncertainties by enhancing the product mix, focusing on high-end models, and improving profitability through cost reduction. Despite the challenges, Hyundai is introducing next-generation models globally and plans to boost sales of gasoline hybrid models. This strategy aims to counterbalance the lower demand for all-electric vehicles, which is occurring amid what the company describes as the EV "chasm" prior to widespread EV adoption. Hyundai has maintained its earnings guidance for the year, targeting an operating profit margin of 8 to 9 percent with an annual sales growth of 4 to 5 percent. From January to September, the company sold 3,075,742 units, achieving 73 percent of its annual sales target of 4.24 million vehicles. In the third quarter, operating profit decreased by 6.5 percent to 3.58 trillion won, while sales increased by 4.7 percent to 42.928 trillion won.