Hyundai Motor posts record second-quarter profit on strong U.S. sales as it expands hybrid lineup | Wilnesh News

Hyundai Motor The company reported record quarterly profit and revenue on Thursday thanks to strong sales of high-margin vehicles and said it would expand its hybrid lineup to prepare for possible changes in U.S. electric vehicle policy after the election.

Its better-than-expected results helped ease growing investor concerns about slowing consumer demand for cars, which has hit some of its rivals, including FordJapan’s Nissan motor and Tesla in the April to June quarter.

But Hyundai also warned of an uncertain outlook as price competition intensifies as inflation and high interest rates squeeze consumers.

The world’s third-largest automaker by sales and its subsidiary Kia said: “As consumer demand for vehicles weakens, we expect competition to intensify and the number of incentives may increase.” ….This will lead to a more severe business outlook.

Hyundai Motor reported net profit of 4 trillion won ($2.9 billion) for the April-June period, an annual increase of 23%, easily exceeding the 3.4 trillion won average estimate of 21 analysts compiled by LSEG SmartEstimate.

Net profit hit its highest quarterly level since hitting a record high in the second quarter of 2022.

Hyundai Motor Co. has overtaken some rivals by boosting sales of high-end SUV models and hybrid vehicles in the United States, a move that has helped it offset long-term sales weakness in the domestic market.

Domestic car sales in South Korea, Hyundai Motor’s second-largest market, fell 10% in the second quarter, widening from a 16% decline in the previous quarter as consumers continued to grapple with soaring inflation and a weak economy.

Hyundai Motor said it will expand its hybrid lineup as global demand for electric vehicles slows and uncertainty grows over U.S. electric vehicle policies.

Republican candidate and former President Donald Trump has been critical of Democratic President Joe Biden’s electric vehicle policies and said he would “end the electric vehicle mandate” if he wins.

“Even if Trump wins the election, we do not believe that the Inflation Reduction Act will be repealed,” Hyundai Motor Chief Financial Officer Lee Seung-jo told analysts on an earnings call, referring to Biden’s signature clean energy policies.

Lee said the company will continue to monitor possibilities and plans to add hybrid products to its lineup “to prepare for possible reductions in IRA plans.”

Hyundai said profitability of its hybrid models was similar to that of gasoline cars, underscoring the segment’s growing contribution to profits while sales of pure electric vehicles fell by nearly a quarter.

Hyundai Motor’s U.S. vehicle sales edged up 2.2% in the second quarter. Hyundai Motor said sales of high-margin SUVs accounted for about 80% of total sales, while sales of hybrid vehicles increased 42% from the same period last year.

Favorable currency rates also helped Hyundai Motor’s profit growth in the second quarter.

The South Korean won’s exchange rate against the U.S. dollar fell 4.3% this quarter compared with the same period last year, boosting Hyundai Motor’s sales and profits repatriated overseas.

Before the results were released, Hyundai Motor’s stock price closed down 2.7%.