Hyundai Motor posts record first-quarter revenue as profit drops on tariffs, higher costs

Hyundai Motor's headquarters in Yangjae, Seoul. [Photo provided by Hyundai Motor]

Hyundai Motor Co. said geopolitical uncertainty and rising costs weighed on its first-quarter results, even as sales in its biggest export market, the United States, held up. The automaker pointed to tariffs, higher raw material prices and currency moves as key drags, and said it plans to lean more on hybrids and other eco-friendly models to regain momentum.

In a preliminary earnings filing on Wednesday, Hyundai said first-quarter operating profit on a consolidated basis fell 30.8% from a year earlier to 2.5147 trillion won. Revenue rose 3.4% to 45.9389 trillion won, the highest ever for a first quarter. While sales grew, profitability weakened.

Hyundai said the continued burden of a 15% tariff, along with a weaker exchange rate tied to geopolitical risks and higher raw material prices, hit operating profit. With multiple cost pressures at once, operating profit fell by more than 1 trillion won from a year earlier.

Lee Seung-jo, head of Hyundai’s planning and finance division, said raw material prices have surged since late last year, creating about a 200 billion won burden on first-quarter results. He said similar cost pressure could continue in the second quarter and that the company is preparing cost-cutting measures.

Hyundai sold 976,219 vehicles worldwide in the first quarter, down 2.5% from a year earlier. The company attributed the decline to heightened geopolitical uncertainty that it said drove global auto demand down 7.2%.

In the United States, Hyundai sold 243,572 vehicles, up 0.3% from a year earlier. Total overseas sales fell 2.1% to 817,153 vehicles. Domestic sales dropped 4.4% to 159,066 vehicles, which Hyundai said reflected demand tied to waiting lists for new models and production disruptions after a fire at its parts plant in Daejeon affected some lines.

Hyundai said sales of electric and hybrid models were strong. The share of eco-friendly vehicles and hybrids in global sales rose to quarterly highs of 24.9% and 17.8%, respectively, as consumer demand shifted toward hybrids amid a slowdown in electric-vehicle growth.

Looking ahead, Hyundai said it will continue to improve its product mix by focusing on higher value-added models such as hybrids. It plans to expand its lineup, including a refreshed Grandeur, and to diversify sales channels by strengthening its push in China and other emerging markets. Hyundai also said it will keep expanding its electrified lineup, including new Ioniq models, range-extended electric vehicles and sedans. It plans to deploy its software-defined vehicle (SDV) “face car,” a test vehicle, on some roads starting in the second half of this year.

* This article has been translated by AI.

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