Hyundai Motor Company achieved record-breaking sales and profit for the first quarter amid deepening concerns over the 25 percent tariffs on automobiles and car parts imposed by US President Donald Trump. According to the carmaker’s earnings report on Thursday, its sales revenue increased 9.2 percent to 44.4 trillion won ($31 billion), while its operating profit climbed 2.1 percent to 3.6 trillion won from January to March compared to last year. Its operating profit margin hit 8.2 percent. Hyundai Motor’s first-quarter revenue and profit surpassed the market estimates by 2.2 percent and 2.6 percent, respectively. “Despite increased incentive costs in Europe and North America, as well as investments in new models and research and development, Hyundai achieved record-high first-quarter results,” said Lee Seung-jo, head of the finance and planning division of Hyundai Motor Group, during a conference call. “This was driven by the highest-ever sales of hybrid vehicles, strong performance in the North American market and a favorable won-dollar exchange rate.” The company sold 1 million vehicles worldwide, a 0.6 percent decrease from the previous year, with sales outside Korea declining 1.4 percent to 834,760 units, impacted by unfavorable global market conditions. However, the North American market showed robust sales of 560,000 units. Global sales of eco-friendly vehicles surged by 38.4 percent compared to last year, reaching a total of 212,426 units, with electric vehicles and hybrids representing 64,091 units and 137,075 units, respectively. Although the US’ 25 percent levies on vehicles and auto parts, which took effect on April 3, have not directly impacted the first quarter earnings, Hyundai Motor pledged to minimize tariff impacts. “We have established a task force to address US tariff challenges (in mid-April) to optimize our profitability-based operational hubs and actively pursue Capex (capital expenditure) and Opex (operating expenditure) contingency plans,” said Lee. “The company is also enhancing production efficiency at our Alabama plant and Hyundai Motor Group Metaplant America in Georgia to reduce costs.” Notably, the Georgia facility’s additional annual capacity of 200,000 units, with plans to start profitable hybrid production next year, is expected to further mitigate the impact of tariffs. One of the key strategies is to mirror the successful approaches used at the Alabama site. This includes conducting competitor teardowns — examining rival companies’ products to analyze automotive components, manufacturing processes and cost structures — to identify cost-saving measures and optimize logistics, according to Lee. For production rebalancing, Lee said the company is redirecting the popular Tucson SUV, originally manufactured in Kia’s Mexican plant, to Hyundai’s Georgia facility, while forwarding its production volume for the Canadian market to the Mexico site to boost profitability. Lee also stressed that Hyundai Motor focuses on localizing parts sourcing in the US and is actively vetting new parts suppliers in the region. It identifies items that can be fast-tracked for mass production to accelerate the impact of tariff reductions. As a short-term strategy, the carmaker has proactively increased its inventory to maintain approximately three months’ worth of vehicles, along with an even larger supply of parts. This approach will allow it to keep the current retail vehicle prices in the US until June 2 by selling off these inventories, after which prices will be adjusted by market demand. Based on these strategies, the carmaker aims to maintain its annual guidance of 3-4 percent revenue growth and 7-8 percent operating profit growth as announced in January. On March 25, Hyundai Motor announced a $21 billion US investment in automotive manufacturing, parts, logistics, steel, future industries and energy sectors, only to face 25 percent "reciprocal" tariffs on cars and parts from Korea.   (ICE SEOUL)

Fonte notizia: The Korea Herald