Hyundai Motor Company sold 898,906 units around the globe in the July-September period, a 9.9% decrease from a year earlier, due to disruption of the chip supply around the globe.
As revealed on the company’s global website on Thursday, while its revenue increased 4.7% year-over-year to KRW 28.87 trillion, Sales in markets outside of Korea were down 6.8% to 744,159 units, and sales in Korea decreased 22.3% to 154,747 units.
Hyundai Motor’s operating profit in the period increased to KRW 1.61 trillion, a turnaround from the same quarter of 2020 when quality-related expenses impacted profitability. The operating profit margin represented 5.6%. Net profit, including non-controlling interest, increased to KRW 1.49 trillion.
Sales of EVs and Genesis luxury brand models drove the momentum in revenue. In addition, the effect of an enhanced product mix grew profitability in the third quarter.
Also, the company projects that its on-year sales growth might slow down for the rest of 2021 amid adverse business conditions caused by the unstable supply of semiconductor chips as well as a potential unfavorable shift in the currency environment.
Regarding the global chip shortage, Hyundai Motor expects the situation to continue affecting production in the fourth quarter.
“Apart from taking all necessary measures to minimize its impact, the company vows to also continue to enhance its product mix with more SUVs and luxury models and optimize production plan and sales strategies while improving profitability despite the challenging business environment.
The company says it is working toward becoming a leader of the electrification era while responding to global environmental regulations with new models, such as IONIQ 5, Hyundai’s first dedicated battery electric vehicle (BEV), and GV60, Genesis brand’s first dedicated BEV model.
Hyundai updated its annual financial guidance to maintain transparency and strengthen creditability for investors. The annual sales target is down to 4 million units from 4.16 million units due to disruption in the supply of chip parts. The company raised the growth rate of revenue in its vehicle parts from 14 ~ 15% to 17 ~ 18% and the operating profit margin from 4 ~ 5% to 4.5 ~ 5.5%.
The company forecast 2021 annual investment at around KRW 8 trillion compared with the previous projection of KRW 8.9 trillion. The revised investment plan includes KRW 3.3 trillion into research and development, KRW 3.9 trillion to capex, and KRW 800 billion for other strategic investments.
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