US Tariffs and Raw Material Costs Weigh, Hyundai Profit Drops 23.6 Percent

JAKARTA - Hyundai Motor recorded a 23.6 percent decline in net profit in the first quarter of 2026 amid the United States automotive tariffs and rising raw material costs due to geopolitical risks.

Citing Yonhap, Thursday, April 23, Hyundai in a report to regulators said its net profit for January-March 2026 fell to 2.58 trillion won, or about US$1.7 billion, from 3.38 trillion won in the same period last year.

Operating profit fell further, by 30.8 percent to 2.51 trillion won. However, sales still rose 3.4 percent to 45.93 trillion won.

Despite the profit shrinking, the result was still above market expectations. A Yonhap Infomax survey showed that analysts' average projection for Hyundai's net profit was at the level of 2.43 trillion won.

Hyundai explained that the decline in profits was triggered by US car tariffs, rising raw material costs, and greater investment. Tariff-related expenses during the first quarter alone amounted to 860 billion won.

On the sales side, Hyundai's global wholesale volume fell 2.5 percent to 976,219 units. The company assessed that the decline reflected the weakening of global automotive market demand, although its performance was said to be relatively solid compared to other manufacturers.

The burden was partly offset by higher-value vehicle sales, especially hybrid cars, as well as an improved financial services business. A Hyundai official said global automotive market demand fell 7.2 percent year-on-year, but the company was still able to maintain sales by increasing the proportion of higher-value models.

Sales of hybrid electric vehicles or HEVs reached a quarterly record of 173,977 units, while sales of pure electric vehicles or EVs were recorded at 58,788 units. The proportion of environmentally friendly vehicles in total sales rose to 24.9 percent. Of that figure, hybrid cars accounted for 17.8 percent. Both are new records for the quarterly level.

Hyundai also recorded a global market share of 4.9 percent from 4.6 percent a year earlier. In the US market, its share rose from 5.6 percent to 6 percent.

Looking ahead, Hyundai expects the business situation to be not easy. Global economic uncertainty, geopolitical risks, and trade tensions are assessed to still be pressuring the automotive industry.

Therefore, the company is preparing to launch new models, expand its higher value vehicle line, and accelerate electrification with a customized strategy in each region. Hyundai also stated that it would tighten cost control and prepare anticipatory measures to hold down profit declines due to tariffs and other external factors.

Amid the situation, Hyundai will still distribute a quarterly dividend of 2,500 won per share, in line with the dividend policy for shareholders announced last year.