Hyundai Motor's Sales Decline but Revenue Increases... High-End Cars and Exchange Rate Effects (Update)

2024 Q1 Business Performance Announcement
Operating Profit 3.6 Trillion KRW... 2.3% Decrease YoY

Hyundai Motor Company announced on the 25th that its consolidated operating profit for the first quarter of this year was 3.5574 trillion KRW, a 2.3% decrease compared to the same period last year.

Sales increased by 7.6% during the same period to 40.6585 trillion KRW. The operating profit margin fell by 0.9 percentage points to 8.7% compared to the same period last year. Net profit for the period decreased by 1.3% to 3.376 trillion KRW.

Domestic and overseas sales volume in the first quarter totaled 1,006,767 units (wholesale basis), down 1.5% from the first quarter of last year. Overseas sales increased by 1.9% to 846,800 units during the same period, but domestic sales dropped by more than 16% to 159,967 units.

The company explained, "Although sales decreased compared to the same period last year due to the shutdown of the Asan plant production line for new car launches, steady growth continued in key regions such as North America and India."

Despite the decrease in sales volume, sales revenue increased due to an improved mix with more expensive models being sold mainly in advanced markets such as the United States, as well as the effect of exchange rates. Volume decline resulted in a loss of about 230 billion KRW, but exchange rate and mix improvements brought gains of over 1.3 trillion KRW.

Looking at the sales proportion by vehicle type, relatively expensive sport utility vehicles (SUVs) accounted for 57.2%, up 4 percentage points from the previous year. The share of the premium brand Genesis increased by 0.5 percentage points to 5.6%. Including Genesis SUV models, SUV sales exceeded 60% of total vehicle sales.

However, sales of eco-friendly vehicles decreased by 4.8% year-on-year to 153,519 units. Hybrid sales reached 97,734 units, accounting for nearly 10% of total vehicle sales. The average KRW-USD exchange rate in the first quarter was 1,328 KRW, about 4% higher than the same period last year.

[Provided by Hyundai Motor Company]

Hyundai Motor expects that competition among companies will intensify, leading to increased costs such as incentives. It also forecasted that unpredictable management environments will continue due to geopolitical risks such as wars and macroeconomic uncertainties mainly in emerging markets. Furthermore, as environmental regulations tighten in major countries and investments in eco-friendly infrastructure increase, the preference for eco-friendly vehicles is expected to steadily rise.

Accordingly, the company stated plans to boost eco-friendly vehicle sales by expanding the dedicated electric vehicle brand Ioniq lineup and reinforcing new hybrid models. It also intends to defend profitability by improving the mix centered on SUVs and high value-added models.

Meanwhile, Hyundai Motor decided to pay an interim dividend of 2,000 KRW per share for the first quarter of this year. The quarterly dividend last year was 1,500 KRW, which has been increased by 33%. The company also announced plans to expand shareholder return policies considering its corporate value-up program.