Hyundai Motor lifts guidance after record-high Q2 results

South Korea’s Hyundai Motor Co. on Wednesday posted its highest-ever quarterly profit, which came in above market expectations, driven by robust sales of premium models such as the Genesis sedan and increased production with the easing automotive chip shortage.

The preliminary second-quarter results marked its third straight quarterly profit growth, since the last quarter of 2022. The Korean won's weakness provided support to its sales growth, improving its price competitiveness against global rivals.

Hyundai’s operating profit jumped 42.2% to 4.2 trillion won ($3.3 billion) in the April-June period from a year earlier on a consolidated basis. This represents an 18% rise from the previous quarter’s 3.6 trillion won, Hyundai’s strongest-ever quarter profit at the time.

Sales increased 17.4% on-year to 42.2 trillion won in the April-June quarter, up 11.8% from three months before. Net profit increased 8.5% on-year to 3.3 trillion won.

Buoyed by the impressive results, Hyundai raised the target of its consolidated operating profit margin to 8-9% for all of 2023, compared to the previous guidance of 6.5-7.5%. It forecasts sales growth of 14-15% this year, up from the previous target of 10.5-11.5% growth.

The carmaker sold 1.06 million cars in the global market in the second quarter, an 8.5% rise from a year earlier.

The global launch of the IONIQ 6 electric sedan and hybrid models drove its second-quarter sales 7.6% higher to 854,210 units from the year previous.

During the period, the Korean won softened 4.4% to 1,315 won per dollar on average.

At home, its sales gained momentum from the seventh-generation Grandeur flagship sedan, an all-new Grandeur released at the end of last year, as well as an all-new Kona compact sedan launched in the first quarter of this year, along with its cars under the premium Genesis brand.

For the entire year of 2023, Hyundai aims to sell 4.32 million cars, after selling 2.08 million units in the first half.

It expects sales will continue to grow this year on the back of steady components supply, higher factory operating rates and solid stand-by demand, following the global launches of revamped models such as the all-new Santa Fe SUV.

LINE-UP OF REVAMPED MODELS TO BE LAUNCHED

Between September and December, Hyundai will roll out a string of upgraded versions of its popular models, including the high-performance electric IONIQ 5 and the makeover of the Tucson mid-size SUV.

Tucson is Hyundai’s best-selling model, accounting for 14% of its sales volume in 2022.

In October, the facelift of the 2024 GV80 mid-size SUV, under the high-end Genesis brand, will be released with the rollout of the GV80 Coupe at around the same time. Cumulative sales of the GV80 surpassed 150,000 units since its 2020 launch.

Its sister company Kia Corp. is slated to unveil makeovers of premium models later this year, starting with the fourth-generation new Sorento SUV next month.

Sorento topped the country’s mid-size SUV market for the past three consecutive years. It sold 36,000 units in the first half of this year.

Kia is pinning its hopes on the large-size premium SUV model EV9 with autonomous pilot systems for highway driving, scheduled to be released in September, as well as the upgraded Carnival van and hybrid models to be rolled out later this year.

Hyundai on Wednesday decided to pay 1,500 won in dividends per share in its first-ever dividend payment for a single quarter.

Write to Il-Gue Kim and Sungsu Bae at black0419@hankyung.com


Yeonhee Kim edited this article.