Hyundai Motor hits Q1 record on currency gains, increased hybrid vehicle sales

Hyundai Motor reported its highest-ever first-quarter revenue thanks to favorable exchange rates and increased sales of hybrid vehicles, despite a slight decline in global car sales.

The manufacturer now faces potential headwinds from tariffs imposed by the Donald Trump administration, which are expected to begin affecting earnings in the second quarter. The company plans to prepare in advance with a complete supply chain in the local region.

Hyundai announced its revenue for the first quarter of 2025, which reached 44.4 trillion won ($30.9 billion), up 9.2 percent from the same period last year. Operating profit rose 2.1 percent on year to 3.6 trillion won.

Though the top line set a new record for the first quarter, the operating margin fell to 8.2 percent from 8.7 percent as profit growth lagged behind revenue.

The carmaker attributed much of the revenue growth to foreign exchange gains and environmentally friendly vehicles.

Of the 3.1 trillion won increase in revenue, about 2.1 trillion won, or 54.9 percent, came from favorable currency effects. An additional 869 billion won, or 23.2 percent, was driven by higher sales of high-value eco-friendly vehicles.

While Hyundai’s first-quarter global sales volume dipped slightly by 0.6 percent to 1,001,120 units this year, sales of hybrid and electric vehicles jumped 38.4 percent to 212,426 units.

“Despite declining sales in emerging markets due to macroeconomic uncertainty, we continued qualitative growth through a greater share of high-value models," said a Hyundai Motor spokesperson.

Operating profit only saw a slight increase because the company bled out on incentives to encourage a boost in sales.

Operating profit in the automobile division slipped 3.5 percent year-on-year from last year's 2.999 trillion won in the first quarter to 2.893 trillion won in the same period this year, with rising sales management costs cited as a key factor. Sales expenses rose 9.8 percent to 5.3 trillion won this first quarter, compared to the year prior. 

“Despite increased incentives and future tech investments, we achieved a record first-quarter revenue, thanks to strong hybrid sales and favorable exchange rates," said Hyundai Motor's executive vice president and CFO Lee Seung-jo during an earnings call on Thursday.

“We believe we’re on track to meet our full-year guidance of 3 to 4 percent revenue growth and 7 to 8 percent operating margin."

Starting this quarter, Hyundai faces increasing pressure from U.S. tariffs.

Trump on April 3 announced a 25-percent tariff on imported automobiles. A 25-percent tariff on auto parts is scheduled to take effect on May 3.

According to S&P Global, these measures could reduce U.S. vehicle production by 944,000 units this year, about 9 percent of 2024 output of approximately 1.056 million units. The Center for Automotive Research in the United States estimated that average added costs per vehicle would be $4,239 for U.S.-built cars and $8,722 for imports.

To counter the impact, Hyundai is speeding up plans to localize production. The company recently held a completion ceremony for its new Georgia-based plant, Hyundai Motor Group Meta Plant America, and said it aims to produce 1.2 million cars annually in the United States. Last year, Hyundai and Kia sold 1.7 million units in the U.S. market.

“We are developing efficiency plans for our U.S. plants and working to secure local suppliers,” said Lee. “Just as we turned the chip shortage during the Covid-19 pandemic into an opportunity, we will respond flexibly and strategically to this new challenge.”

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.

BY OH SAM-GWON [yoon.soyeon@joongang.co.kr]