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 of the year, as U.S.-imposed tariffs on imported vehicles continued to weigh on the Korean automaker's earnings, the company said in a regulatory filing Thursday.
The carmaker's sales rose 3.4 percent to 45.94 trillion won ($31 billion) between January and March, compared to the same quarter last year, thanks to an increase in prices. Its operating profit, however, 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, before lowering the rate to 15 percent in 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 said they expect unfavorable business conditions to persist in upcoming quarters as competition in emerging markets intensifies and macroeconomic uncertainties continue here and abroad.
The carmaker is moving to offset tariff risks by increasing production in the U.S. Hyundai Motor Group Metaplant America, which started operations last year, is at the center of its drive for localized production.
Hyundai Motor plans to increase its annual production capacity to 1.2 million vehicles by 2030, by which time it believes 80 percent of its U.S. sales can be produced locally.
Source: Korea Times News
