Hyundai’s display at the New York International Auto Show on March 28, 2024.
Danielle DeVries | CNBC
Hyundai Motor District reported a record quarterly profit and revenue in strong sales of high-margin cars and said it will expand hybrid lineups to support possible changes in the US policy of electric vehicles after the election.
The predictable performance helped ease investors’ concerns over a slowdown in consumer demand for cars that has hurt some rivals including. FordJapan Nissan Motorcycles and Tesla in the April-June quarter.
But Hyundai also warned of an uncertain outlook as price competition intensified as inflation and high interest rates weighed on consumers.
“As consumer demand for cars is weakening, we expect there will be more competition and the number of incentives will also increase… in the earnings release.
Hyundai reported a net profit of 4 trillion won ($2.9 billion) for the April-June period, up 23% from a year earlier and easily beating the 3.4 trillion won average of 21 analyst estimates compiled by LSEG SmartEstimate.
The net profit was the highest quarter since the previous record high in Q2 2022.
Hyundai outpaced some of its rivals by boosting sales of premium SUV models and hybrid vehicles in the US, a move that also helped offset prolonged sales weakness in the domestic market.
Domestic vehicle sales in South Korea, Hyundai’s second-largest market, fell 10% in the second quarter, up from a 16% decline in the previous quarter, as consumers continued to struggle with rising inflation and a weak economy.
Hyundai says it will expand its hybrid lineup as demand for EVs eases globally and uncertainty rises over U.S. EV policy.
Former President Donald Trump, the Republican candidate, has been critical of Democratic President Joe Biden’s EV policy and said he would “end the electric vehicle mandate” if he wins.
“Even if Trump wins the election, we don’t expect the Inflation Reduction Act to be repealed,” Hyundai Chief Financial Officer Lee Seung Jo told analysts on an earnings call, referring to Biden’s signature clean energy policies.
Lee said the company continues to monitor the possibilities and plans to add hybrid lineups “to prepare for possible shrinking of the IRA package.”
Hyundai said profits from hybrid models were the same as petrol cars, highlighting the segment’s contribution to the bottom line, as pure EV sales fell by almost a quarter.
Hyundai vehicle sales in the US rose 2.2% in the second quarter. High-margin SUV sales accounted for about 80% of the total, while hybrid vehicle sales rose 42% from the same period a year ago, Hyundai said.
A favorable exchange rate in the second quarter also helped Hyundai’s profit growth.
The win was down 4.3% against the dollar in the quarter from a year earlier, boosting Hyundai’s overseas sales and profits.
Shares in Hyundai closed down 2.7% ahead of the results.