Sales hit 49.22 trillion won, operating profit 2.85 trillion won

Weaker demand, parts supply disruptions weigh on volumes

New models including Grandeur to drive second-half recovery

Hyundai Motor's headquarters in Yangjae, Seoul [Hyundai Motor]
Hyundai Motor's headquarters in Yangjae, Seoul [Hyundai Motor]

Hyundai Motor posted record quarterly sales in the second quarter but operating profit fell sharply from a year earlier as rising raw material costs and the fallout from a parts supplier fire weighed on earnings. The automaker plans to launch a wave of new models in the second half to make up for first-half volume shortfalls and focus on restoring profitability.

Hyundai Motor said Thursday its second-quarter operating profit fell 20.8 percent from a year earlier to 2.85 trillion won ($1.93 billion). Wholesale vehicle sales declined 6.9 percent year-on-year to 991,885 units, while revenue rose 1.9 percent over the same period to 49.22 trillion won.

The second-quarter revenue figure was the highest ever recorded for any single quarter. Despite the drop in unit sales, record hybrid electric vehicle (HEV) sales and a favorable exchange rate environment lifted overall revenue. Operating profit margin came in at 5.8 percent, as strong HEV performance and active contingency measures were offset by higher raw material costs and production disruptions caused by the supplier fire.

In January, Hyundai Motor released its 2026 annual earnings guidance, targeting consolidated sales growth of 1.0 to 2.0 percent from the prior year and a consolidated operating profit margin of 6.3 to 7.3 percent. The company set a full-year wholesale sales target of 4.1583 million units.

"The global automotive industry is facing unprecedented challenges, with demand falling 3.8 percent year-on-year amid geopolitical issues and intensifying competition," a company official said. "Nevertheless, we will make every company-wide effort — alongside the full-scale launch of new models in the second half — to meet the annual guidance we set at the start of the year and demonstrate Hyundai Motor's fundamentals to the global market."

Wholesale sales down 6.9% but hybrids hit all-time quarterly high

Parts supply disruptions caused by the supplier fire pushed domestic sales down 16.4 percent year-on-year to 157,647 units. Hyundai Motor plans to expand domestic sales by rolling out a series of competitive new models this year, starting with the newly launched The New Grandeur.

Overseas, the company sold 264,587 units in the United States — a key market — up 0.9 percent from a year earlier, achieving a local market share in the 6 percent range for five consecutive quarters. Overall overseas sales fell 4.9 percent year-on-year to 834,238 units, reflecting broader deterioration in the global automotive business environment driven by shrinking industry demand.

Global electrified vehicle (xEV, including commercial vehicles) sales in the second quarter rose 1.7 percent year-on-year to 266,627 units, driven by growing HEV demand. Of that total, battery electric vehicles accounted for 69,366 units and HEVs for 187,661 units.

HEV sales in particular reached an all-time quarterly high. The combined share of EVs and HEVs in total global sales also hit record quarterly highs, at 26.9 percent and 18.9 percent, respectively.

Hyundai Motor has continued to grow revenue on the back of strong sales of high-value models including HEVs and a favorable exchange rate. The average won-dollar rate in the second quarter was 1,502 won, up 7.0 percent from a year earlier.

The cost of sales ratio rose 1.1 percentage points year-on-year to 82.2 percent due to higher raw material costs. Selling, general and administrative expenses edged up slightly, driven by modest increases in warranty costs and marketing expenses; the ratio of SG&A to sales remained broadly flat at 11.9 percent. As a result, operating profit fell sharply despite record revenue.

Hyundai Motor to ramp up production, maintain contingency plans in H2

Hyundai Motor said it expects the difficult business environment to persist, citing continued macroeconomic uncertainty and intensifying competition among automakers.

To navigate these conditions, the company said it would build new growth momentum around key new model launches. It plans to continue rolling out core new vehicles — including the HEV variant of The New Grandeur and high-volume models such as the Avante — to respond flexibly to shifting market conditions.

Hyundai Motor also said it would concentrate company-wide resources in the second half on ramping up production and sustaining contingency plan execution to offset profitability headwinds from production disruptions and tariff impacts.

"In the second quarter, we faced a challenging business environment marked by geopolitical uncertainty and temporary parts supply disruptions," a company official said. "Going forward, we will respond more flexibly to market demand by operating diverse powertrain options and tailoring our portfolio to individual regions."

Meanwhile, Hyundai Motor will pay a quarterly dividend of 2,500 won per share — unchanged from a year earlier — in line with the value-up program it announced in 2024. "Despite the shifting macroeconomic environment, we will faithfully carry out the shareholder return policy we have committed to, in order to maximize shareholder value," a company official said.


eyre@heraldcorp.com