Headquarters of Hyundai Motor and Kia in Seoul / Courtesy of Hyundai Motor Group
Hyundai Motor reported a double-digit decline in operating profit for the first quarter, as the lingering impact of U.S.-imposed tariffs on imported vehicles continued to weigh on earnings on the Korean automaker, the company said Thursday in a regulatory filing.
The carmaker's sales rose 3.4 percent to 45.94 trillion won ($31 billion) between January and March from a year earlier. Its operating profit, however, sharply fell 30.8 percent to 2.51 trillion won during the same period, putting sustained pressure on the firm’s profitability.
The U.S. began imposing a 25 percent tariff on Korean automobile imports in April last year, and lowered the rate to 15 percent from November.
The carmaker sold 976,219 vehicles in the first quarter, down 2.5 percent from a year earlier, hit by sluggish demand from major markets.
Hyundai Motor expected the unfavorable business conditions to persist for the upcoming quarters to come amid intensifying competition in emerging markets and rising macroeconomic uncertainties here and abroad.
The carmaker is moving to offset the tariff risk by increasing production in the U.S. Hyundai Motor Group Metaplant America, which started its operation last year, is standing at the center of driving its localized production.
Hyundai Motor plans to increase its annual production capacity to 1.2 million vehicles by 2030, and more than 80 percent of its U.S. sales can be produced locally by the timeline.
Source: Korea Times News
