Hyundai Motor Co first quarter profit triples

SEOUL: Hyundai Motor Co posted a first-quarter profit that nearly tripled to its highest in four years as people bought its luxury cars, but warned it would have to adjust production again in May because of a chip shortage.

Unlike its rivals, the South Korean automaker staved off production halts in the first quarter, thanks to a healthy chip inventory. But the shortage, exacerbated by factors including a fire at a chip factory in Japan and storms in Texas, is now catching up with Hyundai.

Hyundai, which together with affiliate Kia Corp is among the world’s top 10 automakers by sales, has temporarily paused production three times since the beginning of this month and saved chips for its most popular models.

“The condition of semiconductor parts is being a litle more prolonged than we expected,” said Seo Gang-hyun, an executive vice president at Hyundai.

“As the semiconductor procurement condition is rapidly changing, it’s difficult to predict production status ater May. We expect that there will likely be similar production adjustment in May, similar or more than what we had in April.”

Analysts have said the halts so far are likely to cost Hyundai about 12,000 vehicles in lost production, and future results will be hurt as the chip crisis continues.

“Although Hyundai could end up cutting some production (in the second quarter), the company likely won’t see huge impact,” said Lee Jae-il, an analyst at Eugene Investment & Securities.