Seoul, April 23 (IANS) Hyundai Motor, South Korea’s top automaker, said on Thursday its first-quarter net profit dropped 23.6 percent on-year amid business environment headwinds involving U.S. tariffs and rising raw material costs.
Net profit for the first three months of this year totalled 2.58 trillion won ($1.7 billion), down from 3.38 trillion won a year ago, the company said in a regulatory filing.
Operating income for the January-March period fell 30.8 percent on-year to 2.51 trillion won, but sales increased 3.4 percent to 45.93 trillion won, reports Yonhap news agency.
Despite the drop in profits, the figure exceeded market expectations. The average estimate of net profit by analysts stood at 2.43 trillion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The company attributed the effects of U.S. auto tariffs, rising raw material costs and increased investment to the decline in profits. Tariff-related costs amounted to 860 billion won during the quarter, according to Hyundai.
Global wholesale sales for the company fell 2.5 percent on-year to 976,219 units, reflecting weaker overall market demand, though the company said it maintained relatively solid performance compared with other carmakers.
The automaker said stronger sales of high-value vehicles, particularly hybrids, and improved performance in its financial services business helped offset a decline in overall vehicle sales.
Hybrid electric vehicle (HEV) sales reached a record quarterly high of 173,977 units, while electric vehicle (EV) sales totalled 58,788 units. The share of eco-friendly vehicles in total sales climbed to 24.9 percent, with hybrids alone accounting for 17.8 percent, both marking record quarterly levels.
Hyundai Motor noted that its global market share rose to 4.9 percent from 4.6 percent a year earlier, while its share in the U.S. market increased to 6 percent from 5.6 percent.
Looking ahead, the company said it expects a challenging business environment to persist due to macroeconomic uncertainties, geopolitical risks and escalating trade tensions.
Hyundai Motor said it plans to drive growth through new model launches, expand its lineup of high-value vehicles and accelerate electrification efforts while adopting region-specific strategies.
The company also said it will strengthen companywide cost management and contingency planning to mitigate profitability pressures stemming from tariffs and other external factors.
—IANS
na/