Hyundai Motor Company posts 5.5% rise in Q3 operating profit despite sharp drop in sales (Updated)

[Financial News] Hyundai Motor Company’s global sales fell by more than 11% in the third quarter, but operating profit rose 5.5%, supported by expanded hybrid electric vehicle (HEV) sales and favorable exchange-rate effects. However, with production disruptions, rising raw-material prices and slowing global demand all weighing on performance, the company lowered its full-year sales target to 4 million vehicles and cut its operating margin outlook by as much as 0.8 percentage points. Its strategy is to restore profitability in the fourth quarter through normalized production and increased sales of new models, though external uncertainties such as U.S. tariffs remain a key variable.
Hyundai Motor Company said on the 29th that it posted third-quarter consolidated revenue of 45.1102 trillion won and operating profit of 2.6772 trillion won. Revenue fell 3.4% from the same period a year earlier, while operating profit increased by 139.9 billion won (5.5%). Its operating margin was 5.9%, up 0.5 percentage points from the same period last year. Revenue by segment was 33.0579 trillion won for automotive and 12.0523 trillion won for finance and other businesses.
Global wholesale sales in the third quarter totaled 927,010 vehicles, down 11.3% from the same period a year earlier. The main causes were fewer working days due to the Chuseok holiday and production disruptions resulting from strikes at domestic plants.
Domestic sales plunged 27.2% year over year to 131,468 vehicles. Overseas sales also fell 8.0% to just 789,242 vehicles, due to a contraction in global auto demand and export disruptions caused by strikes, among other factors.
Expanded sales of hybrid vehicles, a higher-value category, and favorable exchange-rate effects were key to protecting profitability despite the decline in sales. The average won-dollar exchange rate in the third quarter was 1,423 won, up 2.8% from the same period a year earlier. Companywide cost optimization and cost-cutting, as part of a contingency plan, also contributed to improved results.
In fact, rising raw-material prices pushed the cost-of-sales ratio up 1.5 percentage points from the same period a year earlier to 83.8%, while selling, general and administrative expenses as a share of revenue fell 2.0 percentage points to 10.3%.
Hybrid vehicles were a particularly important pillar of performance. Global sales of electrified vehicles totaled 245,540 in the third quarter, down 2.7% year over year, but hybrid vehicle sales rose by about 6,000 from the same period last year to 167,414. By contrast, sales of battery electric vehicles (EVs) totaled 69,117.
Electrified vehicles accounted for 26.7% of total sales, up 2.4 percentage points from the same period a year earlier. The share of hybrid vehicles also rose 2.7 percentage points to 18.2%, continuing the shift in the sales mix toward higher-value models.
A Hyundai Motor Company representative explained, “Sales volume declined in the third quarter due to fewer working days and production disruptions at domestic plants, but we protected profitability through exchange-rate effects, cost-optimization efforts and expanded HEV sales.”
Hyundai Motor Company lowered its full-year sales target and operating margin outlook for this year, the company said on the same day. The move reflects a worsening business environment, including slowing global demand, production disruptions and rising raw-material prices.
The full-year global wholesale sales target was cut by 158,300 vehicles, from 4,158,300 to 4 million. The consolidated operating margin target was also lowered from 6.3–7.3% to 5.5–6.5%, with both the upper and lower ends reduced by 0.8 percentage points. The annual revenue growth target, however, remained unchanged at 1.0–2.0%.
The investment plan for the automotive division was also reduced by 1.8 trillion won, from 17.8 trillion to 16 trillion won. The company plans to improve the efficiency of its fund management by reviewing investment priorities and the timing of spending.
A Hyundai Motor Company representative explained, “This guidance adjustment does not mean that our fundamental business competitiveness or ability to generate profits has weakened. Rather, it is an adjustment to realistically reflect in our full-year outlook factors that were difficult to anticipate, such as rising raw-material prices and production disruptions.”
In the fourth quarter, the company will focus on recovering performance by prioritizing normalized production and the impact of new models. With production at domestic plants back to normal since September, it plans to expand sales of key new models, including the all-new Avante and the All-New Hyundai Tucson, and strengthen product strategies tailored to regional demand in global markets.
However, slowing global auto demand, intensifying competition among automakers, rising raw-material prices and the burden of U.S. tariffs remain factors that could affect a recovery in profitability. Hyundai Motor Company plans to minimize volatility in its results by continuing companywide cost-cutting and improvements to its cost structure while expanding production.
A Hyundai Motor Company representative said, “We will respond flexibly to changes in demand, drawing on a product portfolio optimized for a range of powertrains and regional market conditions,” adding, “Through normalized production, increased sales of new models and ongoing cost improvements, we will overcome the challenging business environment and strengthen our competitiveness over the medium to long term.”
Meanwhile, Hyundai Motor Company decided to maintain its existing shareholder-return policy despite lowering its earnings outlook. Under the Shareholder Value Enhancement Program announced in August 2024, it will pay a third-quarter dividend of 2,500 won per share on both common and preferred shares, unchanged from the previous year. The dividend record date is the 30th of next month, and payment will be made on December 30.
A Hyundai Motor Company representative said, “Even amid a challenging business environment, we will faithfully carry out our promised shareholder-return policy to maximize shareholder value.”

[email protected] Kim Dong-ho Reporter