This file photo, provided by Hyundai Motor, shows the exterior design of the Ioniq 5 N, the first battery-powered model under its high-performance N brand.
SEOUL, July 26 (Korea Bizwire) – South Korea’s Hyundai Motor Co. on Wednesday raised its annual sales and profit guidance for the year after reporting a record operating profit in the second quarter on a weak won and robust sales of high-end models.
Hyundai Motor projected its overall sales will grow 14-15 percent this year, higher than its January guidance of 10.5-11.5 percent, while revising up its operating profit margin to a range of 8-9 percent from 6.5-7.5 percent.
The company will fatten the bottom line by expanding sales of existing models and launching new ones amid stabilizing chip supplies, though global uncertainties, such as additional U.S. rate hikes, remain concerns, Hyundai said in a statement.
To boost sales, Hyundai said it will launch the all-new Santa Fe SUV in August and the all-electric Ioniq 5 N high-performance model initially in the domestic market later this year.
The Ioniq 6 already went on sale in global markets early this year as Hyundai strives to beef up its EV lineup.
The Ioniq 5 and Ioniq 6 are built on Hyundai Motor Group’s dedicated EV platform called E-GMP, with the same platform-based Ioniq 7 set to be released next year.
On Wednesday, Hyundai shares fell 0.9 percent to 198,700 won in line with the broader KOSPI’s 1.7 percent loss.
For the three months ended in June, Hyundai’s net profit rose 8.5 percent to 3.346 trillion won (US$2.6 billion) from 3.084 trillion won a year earlier.
“Global carmakers’ vehicle production is improving due to an easing of semiconductor shortages (that arose during the COVID-19 pandemic) but their incentives remain at 50 percent of the pre-pandemic levels,” Seo Gang-hyun, executive vice president in charge of Hyundai’s finance and accounting division, said in the company’s earnings conference call.
Hyundai also has a low level of incentives and 1.3 months of inventories. Increased average selling prices also helped prop up the quarterly results, he said.
Moreover, friendly exchange rates also helped the quarterly results, the statement said.
The U.S. dollar rose to an average of 1,315 won in the second quarter from 1,260 won a year earlier. A weak won drives up the value of an exporter’s dollar-denominated earnings when converted into the local currency.
This file photo, provided by Hyundai Motor Group, shows Hyundai Motor Co.’s and Kia Corp.’s headquarters buildings in Yangjae, southern Seoul.
In the June quarter, Hyundai’s vehicle sales rose 8.6 percent on-year to 1.06 million units from 976,000 units a year ago, with environment-friendly vehicle sales jumping 49 percent to 192,000 units.
In the U.S., the world’s most important automobile market, Hyundai’s vehicle sales climbed 14 percent to 225,000 units from 198,000 during the mentioned period, with its eco-friendly car sales more than doubling to 46,000 from 21,000 despite the Inflation Reduction Act (IRA).
Hyundai’s EVs are not eligible for federal tax credits under the IRA, which gives up to US$7,500 credit to buyers of EVs assembled only in North America, sparking concerns that Hyundai Motor and its smaller affiliate Kia Corp. could lose ground in the U.S. market, as they make most of their EVs at domestic plants for export to the U.S.
In response to the IRA, Hyundai Motor Group is building its dedicated EV and battery plant in Georgia with an aim to start production in the first half of 2025.
Operating profit jumped 42 percent to an all-time quarterly high of 4.237 trillion won in the second quarter from 2.979 trillion won a year ago.
Sales were up 17 percent to 42.249 trillion won from 35.999 trillion won during the same period.
From January to June, net income jumped 39 percent to 6.766 trillion won from 4.862 trillion won a year earlier.
Operating income surged 60 percent on-year to 7.83 trillion won in the first six months from 4.908 trillion won. Sales gained 21 percent to 80.028 trillion won from 66.298 trillion won.
The maker of Sonata sedans and Palisade SUVs maintained its annual sales target of 4.32 million vehicles and 10.5 trillion won in capital expenditure plan for the year.
(Yonhap)
