Seoul: Hyundai Motor Co., South Korea's leading automaker, announced on Thursday that its net profit for the second quarter fell by 22.1 percent compared to the same period last year. This decline has been attributed to newly imposed U.S. import tariffs, which came into effect in April.
According to Yonhap News Agency, Hyundai's net profit for the three months ending in June dropped to 3.25 trillion won (approximately US$2.4 billion), down from 4.17 trillion won during the same period in the previous year. The company disclosed this information in a regulatory filing. Despite increased vehicle sales in domestic markets, the United States, and Europe, the U.S. tariffs on imported vehicles have started impacting the company's profits. This is coupled with rising incentives and sales-related costs amid intensifying competition, as stated in a press release by Hyundai.
The U.S. government began enforcing a 25 percent tariff on all imported vehicles starting April 2. In response, the South Korean government is attempting to negotiate a reduction in this tariff rate for vehicles imported from South Korea. Hyundai has indicated that these tariff-related risks will continue to pose a significant uncertainty for its operations in the United States, which remains its most crucial overseas market.
The company's operating profit also saw a decline, falling 15.8 percent to 3.6 trillion won from 4.27 trillion won over the year. However, sales saw a 7.3 percent increase, rising to 48.28 trillion won from 45.02 trillion won. For the first half of the year, Hyundai's net income decreased by 12 percent to 6.63 trillion won from 7.54 trillion won in the previous year. Additionally, operating profit dropped by 7.7 percent to 7.23 trillion won from 7.83 trillion won, while sales increased by 8.2 percent to 92.69 trillion won from 85.67 trillion won.