Today, the South Korean automobile company, Hyundai Motor, has announced its financial expenditure for the third quarter of 2021. According to the company, its revenue increased 4.7% year-over-year to KRW 28.87 trillion.
Due to disruptions in chip supply around the world, the company sold 898,906 units in the July-September period, a 9.9% decline from the previous year. Outside of Korea, sales were down 6.8% to 744,159 units, while in Korea, sales were down 22.3 percent to 154,747 units.
At the time, Hyundai Motor’s operating profit grew to KRW 1.61 trillion, a significant improvement over the same quarter in 2020, when quality-related expenses had a negative impact on profitability. The profit margin on operating expenses was 5.6 percent. The company’s net profit climbed to KRW 1.49 trillion, including non-controlling interest.
The growth in revenue was fueled by sales of electric vehicles and Genesis luxury brand cars. In addition, increased profitability was achieved in the third quarter as a result of an improved product mix.
Hyundai Motor forecasts on-year sales growth to decrease in the second half of 2021, owing to challenging business conditions caused by a volatile semiconductor chip supply and a possible negative currency change. However, the corporation will continue to manage these concerns in a proactive manner.
Despite the current business environment, Hyundai Motor will continue to improve its product mix by adding more SUVs and luxury vehicles and refining its production plan and sales tactics.
With new models like the IONIQ 5, Hyundai’s first dedicated battery electric vehicle (BEV), and the GV60, Genesis’ first dedicated BEV model, the business is trying to become a leader in the electrification era while reacting to global environmental standards.
Hyundai modified its yearly financial guidance in order to preserve openness and increase investor confidence. Due to a shortage of chip parts, the annual sales target has been reduced to 4 million units from 4.16 million.
The company increased revenue growth from 14 – 15 percent to 17 – 18 percent in its car parts division and the operating profit margin from 4 – 5 percent to 4.5 – 5.5 percent.
Annual investment in 2021 is expected to be around KRW 8 trillion, down from KRW 8.9 trillion previously predicted. KRW 3.3 trillion for R&D, KRW 3.9 trillion for CAPEX, and KRW 800 billion for additional strategic investments are included in the updated investment plan.