“Harsh Tariffs Hit Hyundai Motor: Despite Record Q3 Revenue, Operating Profit Drops 29.2%”

[Korea Financial Times, Kim JaeHun] Hyundai Motor recorded its highest third-quarter sales ever, driven by strong sales in key markets. However, profitability retreated as U.S. tariff impacts materialized in full. Hyundai Motor plans to successfully achieve its annual guidance this year through aggressive tariff response policies.

Hyundai Motor held an earnings conference call on the 30th and announced that its Q3 2025 results were: ▲1,038,353 units in wholesale sales, ▲consolidated sales of KRW 46.7214 trillion (automobiles KRW 36.7145 trillion, finance and others KRW 10.0069 trillion), ▲operating profit of KRW 2.5373 trillion, ▲ordinary profit of KRW 3.3260 trillion, and ▲net profit of KRW 2.5482 trillion (including non-controlling interests).

Hyundai Motor achieved its highest third-quarter sales ever, up 8.8% year-over-year, driven by strong sales in key markets including the U.S. and Europe, favorable exchange rate effects, and improved financial sector performance. The previous highest third-quarter sales was KRW 42.9283 trillion in Q3 2024.

However, operating profit decreased approximately 29.2% year-over-year as U.S. tariff impacts continued. Losses due to U.S. tariffs in Q3 this year amounted to approximately KRW 1.8210 trillion. The operating profit margin also recorded 5.4%, down 2.9 percentage points year-over-year, as U.S. tariff impacts materialized in full.

José Muñoz, President and CEO of Hyundai Motor Company, stated, "Based on solid business fundamentals and strategic responses to market fluctuations, we expanded global automotive sales and achieved the highest third-quarter sales," adding, "While operating profit was affected by increased incentives due to intensifying market competition and tariffs, Hyundai Motor is establishing a foundation for strengthening profitability through production strategy optimization and diversified powertrain strategies."

Lee Seung-jo, head of Hyundai Motor's Planning and Finance Division, stated during the earnings conference call that day, “While we previously focused on reducing the cost of new vehicles due to the impact of tariffs, we now recognize the need to also strengthen our R&D capabilities for mass-produced vehicles.” He added, “We will re-examine our mid-to-long-term roadmap, focusing on high-profit hybrid models.”

Looking at detailed performance, in the domestic market, SUV sales grew with the new vehicle effect of the Palisade Hybrid (HEV) and IONIQ 9, with 180,558 units sold, up 6.3% year-over-year. Overseas, 857,795 units were sold, up 1.9% year-over-year. While emerging market sales decreased due to deteriorating external conditions, 257,446 units were sold in the U.S., up 2.4% year-over-year.

Global eco-friendly vehicle sales (including commercial vehicles) in Q3 2025 totaled 252,343 units, up 25.0% year-over-year, driven by expanded electric vehicle (EV) sales proportion centered on Europe and sales traction from strengthened hybrid lineup. Of these, 76,153 EVs and 161,251 hybrids were sold.

Hyundai Motor anticipated that profit and loss impacts from changes in the trade environment, including tariffs, will serve as major risk factors in future business activities. However, with the 15% reduced tariff rate to be applied from November 1, it projected positive impacts on future profitability defense.

The Korean government previously agreed to lower automobile tariffs from 25% to 15% at the Korea-U.S. summit held during the APEC Summit on the 29th. The industry projected this measure would reduce monthly tariff losses by approximately KRW 500 billion.

Division Head Lee stated, "With government efforts bearing fruit, Hyundai Motor's tariff uncertainty has been resolved," explaining, "The biggest effect is that predictable elements have emerged in corporate operations from Q4 onward."

He added, “As I have consistently stated since the beginning of the year, we view the increased costs due to tariffs as an opportunity to reassess our core competencies and improve our fundamentals,” and stated, “We will use this as an opportunity to secure future competitiveness.”

Despite continuing uncertainty, Hyundai Motor emphasized its determination to achieve its "2025 consolidated annual guidance" through proactive and aggressive contingency plan implementation. Hyundai Motor announced revised guidance at the CEO Investor Day in September, including ▲5.0-6.0% consolidated sales growth target year-over-year ▲6.0-7.0% consolidated segment operating profit margin target.

In particular, Hyundai Motor plans to continue creating growth momentum through rigorous analysis of recent complex internal and external management risks and bold innovation to secure fundamental future competitiveness.

Finally, Hyundai Motor set the Q3 2025 common stock dividend at KRW 2,500, a 25% increase from the same period last year (KRW 2,000), based on the value-up program announced last year.

Division Head Lee stated, "Despite macroeconomic environmental changes, Hyundai Motor will strive for faithful implementation of the previously promised shareholder return policy of 'minimum 35% Total Shareholder Return (TSR)' to maximize shareholder value."

Kim JaeHun (rlqm93@fntimes.com)