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Photo = Hyundai Motor Group |
[Alpha Biz= Paul Lee] Seoul, October 9 — South Korean automakers Hyundai Motor and Kia Corp. are expected to report a sharp drop in third-quarter operating profit, as U.S. import tariffs continue to erode margins and bilateral negotiations for tariff relief stall.
According to consensus data compiled by Yonhap Infomax, Hyundai Motor’s Q3 sales and operating profit are projected at ₩45.13 trillion and ₩2.63 trillion, respectively — up 5.1% in sales but down 26.6% year-on-year in profit.
Kia’s Q3 sales are estimated at ₩27.97 trillion, a 5.5% increase from a year earlier, while operating profit is expected to fall 22.3% to ₩2.24 trillion.
The decline marks a deeper contraction than in Q2, when Hyundai’s operating profit fell 15.8% and Kia’s dropped 24.1% year-on-year. Analysts attribute the worsening performance to higher tariff expenses in the U.S., which expanded as pre-tariff inventory buffers were depleted.
South Korea and the U.S. had agreed in July to reduce auto tariffs from 25% to 15%, but follow-up negotiations have stalled, leaving Hyundai and Kia still subject to the 25% rate.
Analysts at Hanwha Investment & Securities estimate Q3 tariff costs at ₩1.5 trillion for Hyundai and ₩1.23 trillion for Kia, roughly 1.6 to 1.8 times higher than in Q2. The tariffs likely impacted around 150,000 Hyundai vehicles and 142,000 Kia vehicles, they added.
Hanwha noted that U.S. tariffs, rather than labor or quality costs, were the biggest drag on Q3 earnings, with Hyundai and Kia’s combined operating profit expected to decline by more than ₩2.5 trillion due to trade-related headwinds.
Despite weaker profitability, Hyundai and Kia are still aiming to achieve ₩20 trillion in combined operating profit for the full year — marking a third consecutive year at that level — after posting ₩13 trillion in the first half.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
