Hyundai Motor Group Surpasses Volkswagen in Q1 Operating Profit... Ranked 1st Among Top 5 in Operating Margin

Operating Profit Margin at 10.4% Surpasses Toyota
Sales Volume and Profitability Solidify 'Big 3' Status

Hyundai Motor Group's operating profit in the first quarter of this year surpassed that of Volkswagen Group, the world's second-largest automaker, for the first time. Additionally, Hyundai Motor Group solidified its position as a 'Big 3' not only in sales volume but also in profitability by recording the highest operating profit margin among the 'Top 5' automakers.

Hyundai Motor Group Yangjae Headquarters Building.

According to an analysis of the first-quarter results of the top five automakers based on last year's sales volume on the 12th, Hyundai Motor Group (Hyundai Motor Company, Kia, Genesis) posted sales of KRW 66.8714 trillion and an operating profit of KRW 6.9831 trillion in the first quarter of this year. This marks the second-highest sales and operating profit in history. During the same period, Hyundai Motor Group sold 1.767 million units globally, maintaining its third-place ranking in sales volume following last year.

Global leader Toyota Group recorded sales of JPY 11.0726 trillion (KRW 97.54 trillion) and an operating profit of JPY 1.1126 trillion (KRW 9.8 trillion) in the fourth quarter of fiscal year 2023, which corresponds to the first quarter of this year. Volkswagen, ranked second, posted sales of EUR 75.46 billion (KRW 111.55 trillion) and an operating profit of EUR 4.59 billion (KRW 6.78 trillion) in the first quarter.

The Renault-Nissan-Mitsubishi Alliance, ranked fourth after Hyundai Motor Group, did not disclose its sales and operating profit figures. However, considering its sales volume (1.699 million units), combined operating profit margin (approximately 4.3%), and average selling price, its operating profit is estimated to fall short of Hyundai Motor Group's. GM Group recorded sales of USD 43.014 billion (KRW 59 trillion) and an operating profit of USD 3.738 billion (KRW 5.1 trillion).

In terms of operating profit (converted to Korean won), one of the indicators of profitability, Hyundai Motor Group surpassed Volkswagen Group and rose to second place behind Toyota. Even considering the sharp rise in exchange rates since last year, this is the first time Hyundai Motor Group's quarterly operating profit has exceeded that of Volkswagen Group in the first quarter of this year.

Hyundai Motor Group also achieved the highest operating profit margin among the Top 5 in the first quarter. Hyundai Motor Company (including Genesis) and Kia recorded a combined operating profit margin of 10.4%, surpassing Toyota Group (10.0%), GM Group (8.7%), Volkswagen Group (6.1%), and Renault-Nissan-Mitsubishi (4.3%).

Compared to premium brands with higher profitability indicators than other mass-market brands, such as BMW (11.4%) and Mercedes-Benz (10.7%), Hyundai Motor Group is slightly behind. However, considering that Kia recorded an operating profit margin of 13.1% in the first quarter, surpassing these brands, it demonstrates world-class profitability.

Hyundai Motor Group is shedding its previous image as a cost-effective brand and strengthening its position as a high-profit brand. However, the outlook is mixed as the electric vehicle market, in which Hyundai Motor Group is aggressively investing, is currently experiencing a temporary demand stagnation phase (chasm).

Nonetheless, the industry generally holds a positive outlook if Hyundai Motor Group continues its 'two-track' strategy of reinforcing high value-added and hybrid models to support current performance while intensifying investments in electric vehicles and hydrogen sectors for the future.