Seoul: Hyundai Motor Co., South Korea's leading automaker, announced a significant decline in its second-quarter net profit, which fell by 11.2 percent compared to the same period last year. The drop is attributed to increased costs and production setbacks.
According to Yonhap News Agency, Hyundai's net profit for the quarter ending in June decreased to 2.88 trillion won (approximately US$2 billion), down from 3.25 trillion won from the previous year. The company cited higher raw material costs and production losses resulting from a fire at a major parts supplier as key factors impacting its quarterly earnings.
The automaker reported a 20.8 percent decline in operating profit, which fell to 2.85 trillion won from 3.6 trillion won a year earlier. In contrast, sales experienced a moderate rise of 1.9 percent, reaching 49.21 trillion won from 48.28 trillion won. Hyundai attributed the increase in revenue to strong sales of higher-margin hybrid vehicles and favorable exchange rates, despite the ongoing challenges of higher manufacturing and marketing costs.
During the second quarter, the average exchange rate for the dollar rose to 1,501.93 won from 1,404.04 won a year earlier, as per data from the Bank of Korea. This weaker won increased the value of Hyundai's dollar-denominated earnings when converted into the local currency.
Looking to the future, Hyundai Motor noted that uncertainties in the global economy and intensifying competition within the automotive industry are expected to remain significant challenges in the latter half of the year. To address these issues, the company plans to bolster its growth by launching new models, including the all-new Avante compact sedan and a hybrid version of the New Grandeur sedan.
Hyundai also emphasized its commitment to maintaining contingency plans to manage potential downturns, such as U.S. tariffs. The company, known for its Sonata sedan and Palisade SUV, remains optimistic about achieving its 2026 targets, which include an annual sales growth of 1-2 percent and vehicle sales reaching 4.158 million units.
In 2025, Hyundai recorded sales of 186.2 trillion won and sold 4.138 million vehicles. For the first half of the current year, net profit fell 17.5 percent to 5.47 trillion won, down from 6.63 trillion won a year ago. Operating profit also decreased by 25.8 percent to 5.36 trillion won from 7.23 trillion won, although sales increased by 2.7 percent to 95.15 trillion won from 92.69 trillion won.