Dive Brief:
- Hyundai Motor Group said Q3 operating profits fell 29.2% year over year as U.S. tariffs began to take full effect, according to the automaker’s Q3 earnings results Thursday.
- While Hyundai reported record-setting Q3 revenues of 46.7 trillion won ($32.6 billion), the company said import duties along with higher incentives contributed to its net profits tumbling 20.5% to 2.55 trillion won ($1.8 billion).
- President and CEO José Muñoz was not discouraged by the setback and credited the company’s positive Q3 revenue performance to its “strong business fundamentals and strategic navigation of a complex global environment.” However, the company remains cautious, noting in a statement that it “will continue to monitor the influence of the macroeconomic environment on its business outlook.”
Dive Insight:
Business uncertainty fueled by tariffs has created an environment where automakers have had to pivot quickly to adapt to market conditions. General Motors reported tariffs cost the company $1.1 billion in Q3 and has since announced thousands of layoffs to control costs.
While Hyundai has not indicated it will take a similar approach, the company did say in its earnings release it would “implement operations optimization plans to navigate the challenging landscape.”
Muñoz said that the company is managing the marketplace through disciplined execution and optimized production strategies, including localizing in the U.S.
“We’re gaining market share in North America and Europe,” he said. “Our diversified powertrain strategy is resonating with customers, and our manufacturing investments are positioning us for sustained profitability.”
The automaker last month announced a strategy that called for launching a mid-sized pickup in the U.S., while also setting goals of doubling its hybrid offerings and assembling 80% of its vehicles sold in the U.S. domestically by 2030.
Globally, Hyundai reported sales of just over 1 million units in Q3, a 2.6% YoY increase. Sales of electrified models during the quarter jumped 25% YoY to 252,343 units.
The automaker said despite global business uncertainties, it remained committed to meeting its 2025 guidance of growing revenues between 5% and 6% and achieving a sustainable operating profit margin of between 7% and 8% by 2027.
