Hyundai Motor’s Q1 profit drops 2.4%

SEOUL: South Korean automaker Hyundai Motor Co’s first-quarter profit fell 2.4 per cent, hit by a tumble in domestic sales, and it warned of a challenging business outlook due to rising competition and uncertain global economic conditions.

Hyundai’s cautious outlook and weak performance reported contrast with more bullish forecasts from its US rivals such as General Motors and Ford Motor Co who this week reported strong profit growth thanks to stable pricing and demand for gasoline-engine vehicles.

“We expect competition among automakers to intensify, raising related cost burden... while global macroeconomic uncertainty is also growing. We expect challenging business conditions to continue going forward,” Hyundai said in a statement.

The world’s No.3 automaker by sales along with affiliate Kia Corp sold 1.5 per cent fewer vehicles, delivering 1.007 million units in the first quarter.

Sales in South Korea, its second-biggest market after the United States, slumped 16 per cent, as consumers grappled with surging inflation and a weak economy.

Hyundai said domestic sales were also impacted by temporary suspension of production at its Asan plant, which is being revamped for production of electric vehicles (EVS).

Vehicle sales in the US market jumped nearly 10 per cent, tracking other legacy automakers that are enjoying strong profit growth.

Sales of hybrid vehicles jumped 17 per cent globally, underscoring consumers’ growing interest in more affordable vehicles over more expensive pure electric cars.