On the 26th, Hyundai Motor held a conference call to announce its management performance, reporting that the sales for the third quarter of 2023 were 1,045,510 units based on IFRS consolidated standards, with revenue of 41 trillion 2.7 billion won (32 trillion 3.118 billion won from automobiles and 8 trillion 6.909 billion won from finance and others), operating profit of 3 trillion 8.218 billion won, ordinary profit of 4 trillion 6.672 billion won, and net profit of 3 trillion 3.035 billion won (including non-controlling interest).
Hyundai’s sales in the third quarter of 2023 increased compared to the previous year, driven by solid sales growth in major regions such as North America, Europe, and India. Operating profit saw a significant increase compared to the same period last year due to positive factors such as increased sales volume and a better mix centered on high-value models, along with base effects from the establishment of sales warranty reserves last year in the third quarter.
A Hyundai representative stated, “The continuous trend of sales expansion continues due to increased demand in major markets, and we expect annual sales growth this year based on low inventory levels and the effects of new models such as the all-new Santa Fe.” However, he also expressed concerns about the ongoing uncertain business environment due to geopolitical risks in the Middle East and high interest rates, as well as the volatility of external macroeconomic conditions.
Hyundai sold 1,045,510 units in the global market during the third quarter of 2023 (July-September), which represents a 2.0% increase from the same period last year. (Based on wholesale sales)
In the domestic market, the positive consumer response to the newly launched ‘All-New Santa Fe’ in August and the increase in SUV-centered sales contributed to a 2.8% rise in sales to 166,969 units compared to the same period last year. In overseas markets, strong sales growth was seen, with production increases due to improved parts supply and strong sales in major markets such as North America, Europe, and India, resulting in 878,541 units sold, a 1.9% increase from the same period last year.
Global eco-friendly vehicle sales increased by 33.3% year-on-year to record 168,953 units, boosted by a strengthened hybrid lineup and expanded sales of the dedicated electric vehicle brand ‘Ioniq’.
Revenue was reported to be 41 trillion 2.7 billion won, which is an 8.7% increase compared to the same period last year. The increase in revenue was driven by increased sales volume and improvements in the sales mix centered around Genesis and SUVs. The average exchange rate of the Korean won to the US dollar in the third quarter of 2023 was recorded at 1,311 won, a 2.0% decrease from the same period last year.
The cost of sales ratio decreased by 1.1 percentage points from the same period last year, standing at 79.4%. Improvements were made due to increased operation rates from improved parts supply and lower raw material prices. Selling and administrative expenses fell compared to the same period last year due to decreased sales warranty costs, with the ratio of selling and administrative expenses to revenue recorded at 11.3%, a decrease of 4.1 percentage points from the same period last year.
As a result, the operating profit for the third quarter of 2023 amounted to 3 trillion 8.218 billion won, a significant 146.3% increase compared to the same period last year. This figure marks the highest operating profit recorded for the third quarter (the previous highest being 2 trillion 9.89 billion won in the third quarter of 2011), reflecting substantial growth due to base effects from the sales warranty reserve set last year.
Ordinary profit and net profit were recorded at 4 trillion 6.672 billion won and 3 trillion 3.035 billion won, respectively.
Additionally, the cumulative performance for the third quarter (January-September) showed sales of 3 million 127,037 units, revenue of 121 trillion 311 billion won, and operating profit of 11 trillion 6.524 billion won.
Although Hyundai expects good performance in the future due to increased demand in major regions, they also anticipate ongoing uncertainties in the management environment due to geopolitical influences, such as conflicts between countries in the Middle East, inflationary pressures, and fears of demand contraction in emerging areas due to high interest rates.
Furthermore, they expect that increased exchange rate volatility and rising sales-related costs resulting from intensifying competition among manufacturers will continue to be burdensome for management activities.
The global automotive market is projected to continue its strong growth in the eco-friendly vehicle segment, driven by stricter environmental regulations in major countries, increased investments in eco-friendly infrastructure, and growing consumer preference for eco-friendly vehicles.
Hyundai plans to focus on expanding sales of eco-friendly vehicles through enhancing global brand recognition for its dedicated electric vehicle brand ‘Ioniq’, continuous strengthening of its hybrid lineup, maximizing sales through production and sales optimization, and improving market share and profitability through higher value models like the Genesis GV80 facelift and GV80 coupe.
Lee Sang-jin daedusj@autodiary.kr