Hyundai overtakes Volkswagen in operating profit, entering top 2 in profitability

Hyundai N tuned cars at the Hyundai N x Toyota Gazoo Racing Festival on October 27. Yonhap News

Hyundai Motor Group, the world's third-largest automaker, has significantly outpaced Volkswagen Group, the second-largest, in operating profit for the third quarter and the first three quarters of this year cumulatively.

As Volkswagen Group is unlikely to rebound in the remaining fourth quarter due to weakness in the Chinese market, Hyundai Motor Group is expected to join Toyota Group as the top two most profitable global automakers this year.

Hyundai Motor Group (Hyundai Motor, Kia Motors and Genesis) posted sales of 69.4481 trillion won and operating profit of 6.4622 trillion won in the third quarter of this year, according to an analysis of the performance of the top three global automakers on November 7. In the first three quarters, sales and operating profit were 208.908 trillion won and 21.368 trillion won, respectively.

In terms of operating profit alone, the company is second only to Toyota Motor Corporation, which is No. 1 in both the third quarter and the first three quarters.

Toyota Motor Corporation, which announced its fiscal 2024 second quarter (equivalent of the third quarter in South Korea) results on November 6, reported sales and operating income of 11.444 trillion yen (103.800 trillion won) and 1.156 trillion yen (10.5 trillion won), respectively. For the first three quarters of the year, the group posted sales of 34.355 trillion yen (311.5000 trillion won) and operating income of 3.5760 trillion yen (32.4000 trillion won).

Hyundai Motor Group significantly outperformed Volkswagen Group in terms of operating profit, which reported sales and operating profit of 78.5 billion euro (118 trillion won) and 2.86 billion euros (4.3 trillion won), respectively, in the third quarter of this year. In the first three quarters, sales were 237.79 billion euros (355.830 trillion won), and operating profit was 12.97 billion euro (19.357 trillion won). For both the third quarter and the cumulative first three quarters, Hyundai Motor Group's operating profit was more than Volkswagen’s by 2 trillion won.

Considering that Hyundai Motor Group's operating profit shrank by 1 trillion won in the third quarter of this year due to provisions for extended warranties, Volkswagen Group's slump is more severe than expected.

In another indicator of profitability, the operating profit margin, Hyundai Motor Group outperformed Volkswagen by a wide margin.

Hyundai Motor Group's operating profit margin was 9.3 percent and 10.2 percent in the third quarter and the first three quarters, respectively, compared to 3.6 percent and 5.4 percent for Volkswagen.

Toyota Group's operating margin was 10.1 percent in the third quarter and 10.4 percent in the first three quarters of the year.

If this trend continues into the fourth quarter, the automotive industry expects Hyundai Motor Group to overtake Volkswagen Group as the “top two” in terms of profitability this year. Volkswagen Group has been on a bad note lately, with the company announcing plans to close at least three of its German plants and cut tens of thousands of jobs.

However, it will be a while before Hyundai Motor Group surpasses Volkswagen in global sales.

Hyundai Motor Group sold 5.395 million vehicles in the first nine months of this year, ranking third in global sales behind Toyota Motor Corporation (7.17 million) and Volkswagen Group (6.52 million).

※This article has undergone review by a professional translator after being translated by an AI translation tool.