[팍스넷뉴스 설동협 기자] Hyundai Motor Company recorded sluggish earnings in the third quarter of this year. This is due to negative growth in profitability due to large scale quality costs associated with the GDi engine.
Hyundai Motor Company announced on the 24th that it recorded 37.70 trillion won in sales and 1.55 trillion won in operating profit on a consolidated basis in the third quarter of this year. Sales increased 30.6% YoY, but operating profit fell 3.4% over the same period.
Initially, Hyundai Motor’s 3Q earnings were forecast to continue growing thanks to ▲sales growth ▲genesis and SUV-focused sales mix improvement ▲incentive reduction ▲exchange rate impact.
In fact, Hyundai Motor sold 1,025,000 units in the global market in the third quarter of this year. This is an increase of 14.0% compared to the same period last year. In the domestic market, sales of new car models such as ‘IONIQ 6’ launched in July and high added value models such as ‘Grandeur’ and ‘GV80’ also showed solid sales, recording an increase of 5.0% to 162,439 units in during the same. period.
However, the quality cost associated with the Theta 2 GDi engine held back good results. According to Hyundai, the quality cost is about 1.36 trillion won. In addition, it is analyzed that the effect of higher sales guarantee costs and new car marketing costs have also contributed to the decline in profitability.
However, Hyundai Motor plans to improve profitability in the fourth quarter of this year. According to the ‘2022 Revised Annual Performance Guide’ shared by Hyundai Motor Company on the same day, the target for this year’s operating profit has been raised to 7.5%, up 1 percentage point from the previous 6.5%. Despite a reflection of the quality cost associated with the Theta 2 GDi engine, the company plans to improve profits annually by continuously improving the sales mix and reducing incentives.
Hyundai Motor also talked about the possibility of setting up a joint venture (JV) to localize batteries in order to minimize the damage from the recent US Inflation Reduction Act (IRA).
An official from Hyundai Motor said in a conference call in the third quarter, “We are considering different localization measures, such as establishing a joint venture to procure key parts for electric vehicles such as electric vehicle batteries.”
Meanwhile, at the end of the third quarter of last year, the number of units awaiting shipment by Hyundai Motor Company reached about 750,000 units, including domestic and foreign. The number of units awaiting shipment means a high order backlog, which is expected to contribute to Hyundai Motor’s 4Q earnings growth.
“At the end of the third quarter, there were 750,000 unsold cars in Korea, and most of the unsold cars are high value-added models such as sport utility vehicles (SUVs) and Genesis,” said Yoon Tae- sik, head of Hyundai Motor Company’s IR team It looks like it will last,” he said.
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