SEOUL, April 10 (AJP) – South Korea's top automakers Hyundai Motor and Kia are expected to deliver double-digit falls in their respective first-quarter operating profit on multiple whammies - U.S. tariffs, currency-driven cost pressures and recall-related expenses – despite robust sales.
Hyundai Motor is projected to report operating profit of 2.94 trillion won ($2.0 billion) for the January–March period, down 19 percent from a year earlier, and its sister marque Kia 2.45 trillion won, down 18.7 percent, according to market consensus compiled by FnGuide.
Top-line momentum, however, remains intact. Hyundai Motor’s sales are expected to rise 4 percent on year to 46.17 trillion won, while Kia is forecast to post a record 29.67 trillion won, up 5.9 percent. Hyundai Motor is scheduled to release earnings on April 23, and Kia the following day.
The earnings compression reflects a convergence of external shocks. A 15 percent tariff imposed by the United States on imported vehicles since last year is estimated to have added roughly 1 trillion won in costs for Hyundai Motor and between 600 billion won and 800 billion won for Kia in the first quarter alone.
Currency moves compounded the pressure. The Korean won weakened about 6 percent against the dollar from December through March, inflating warranty-related provisions by an estimated 300 billion won.
One-off factors also weighed. A recall tied to an electrified seat defect in the Palisade SUV last month led to a temporary halt in sales, adding to cost burdens.
Despite margin pressure, both automakers continued to benefit from a richer product mix. Demand for higher-margin SUVs, hybrids and electric vehicles remained firm, supporting revenue growth and cushioning the earnings decline.
Combined global sales reached 1.75 million units in the first quarter, with Hyundai Motor selling 975,213 vehicles and Kia 779,169 — broadly sustaining last year’s record pace. In the United States, combined sales rose 2.6 percent to a quarterly high of 430,720 units.
Electrification trends also remained a bright spot. Hyundai Motor sold 60,214 eco-friendly vehicles during the quarter, including a record 39,597 hybrids, while Kia posted its strongest first-quarter EV sales at 34,303 units.
Looking ahead, both companies are set to accelerate new model rollouts to defend margins. Hyundai Motor plans to introduce hybrid versions of the Avante and Tucson, while Kia will launch EV4 and EV5 models. Premium brand Genesis is also preparing hybrid variants of the GV80 and the flagship GV90.
While near-term earnings are under pressure, the combination of resilient volumes, improved mix and electrification momentum is prompting a gradual valuation reset, as investors shift focus from cyclical margins to longer-term competitiveness in the evolving mobility landscape.
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