HMC’s wholesales (excluding non-consolidated Chinese joint ventures) were 990,000 units in Q3 2024, unchanged from a year earlier. There were falls of 5.7% in India, 9.5% in Europe, 4.3% in South America, 61% in China and 1.2% in the rest of the world, but these declines were offset by rises of 9.3% in North America and 1.8% in Korea.
HMC Q3-2024 -v- yr ago (ch. %)
HMC consolidated op’ margin (%)
HMC automobile op’ margin (%)
Group revenue rose by 4.7%, helped mostly by a richer mix and partly by favourable exchange rates. However, group operating profit missed consensus forecasts as it dropped by 6.5% to KRW3,581bn and the margin fell 1.0 points y-o-y to 8.3% and by 0.8 points from the previous quarter. Profit growth was particularly constrained by higher SG&A expense, including a 17% rise in SG&A-related salaries and a 9.3% rise in marketing expense as incentive spending rose.
| Hyundai Motor | Unit | 9Mo-24 | Q3-24 | H1-24 | Q2-24 | Q1-24 | |||||
| Group | Data | % ch. | Data | % ch. | Data | % ch. | Data | % ch. | Data | % ch. | |
| Revenue | W bn | 128,608 | 6.3 | 42,928 | 4.7 | 85,680 | 7.1 | 45,021 | 6.6 | 40,659 | 7.6 |
| Operating profit | W bn | 12,115 | 3.4 | 4,279 | 11.8 | 7,836 | (0.7) | 4,279 | 0.7 | 3,557 | (2.3) |
| Pre-tax profit | W bn | 15,859 | 10.4 | 5,566 | 18.2 | 10,293 | 6.7 | 5,566 | 11.2 | 4,727 | 1.7 |
| Net profit | W bn | 11,724 | 16.4 | 4,174 | 26.4 | 7,550 | 11.6 | 4,174 | 24.7 | 3,376 | (1.3) |
| Employees | 000’s | 123.7 | (0.4) | 123.7 | (0.4) | 123.7 | (1.0) | 123.7 | (1.0) | 123.7 | (1.5) |
| Unit sales | 000’s | 3,076 | (1.7) | 1,012 | (3.3) | 2,064 | (0.9) | 1,057 | (0.3) | 1,007 | (1.5) |
| Domestic | 000’s | 516 | (8.5) | 170 | 1.8 | 346 | (12.8) | 186 | (9.7) | 160 | (16.2) |
| N. America | 000’s | 897 | 11.8 | 300 | 9.1 | 597 | 13.3 | 310 | 15.2 | 287 | 11.2 |
| China | 000’s | 105 | (40.3) | 22 | (60.7) | 83 | (30.8) | 35 | (41.7) | 48 | (20.0) |
| Europe | 000’s | 453 | (4.4) | 139 | (9.2) | 314 | (2.2) | 157 | (5.4) | 157 | 1.3 |
| Other | 000’s | 1,105 | (0.6) | 381 | (3.5) | 724 | 1.0 | 369 | 2.8 | 355 | (0.8) |
| Per unit | |||||||||||
| Revenue | W mil | 41.81 | 8.1 | 42.42 | 8.2 | 41.51 | 8.0 | 42.59 | 6.9 | 40.38 | 9.3 |
| Operating profit | W mil | 3.94 | 5.1 | 4.23 | 15.5 | 3.80 | 0.2 | 4.05 | 1.0 | 3.53 | (0.9) |
| Pre-tax profit | W mil | 5.16 | 12.3 | 5.50 | 22.2 | 4.99 | 7.6 | 5.27 | 12 | 4.69 | 3.2 |
| Net profit | W mil | 3.81 | 18.4 | 4.12 | 30.6 | 3.66 | 12.6 | 3.95 | 25 | 3.35 | 0.2 |
| Per employee | |||||||||||
| Revenue | W mil | 1,039.7 | 6.7 | 347.0 | 5.1 | 692.6 | 8.1 | 364.0 | 7.6 | 328.7 | 9.3 |
| Operating profit | W mil | 97.9 | 3.8 | 34.6 | 12.2 | 63.3 | 0.3 | 34.6 | 2 | 28.8 | (0.8) |
| Pre-tax profit | W mil | 128.2 | 10.9 | 45.0 | 18.7 | 83.2 | 7.7 | 45.0 | 12 | 38.2 | 3.3 |
| Net profit | W mil | 94.8 | 16.9 | 33.7 | 26.9 | 61.0 | 12.7 | 33.7 | 26 | 27.3 | 0.2 |
| Sales | units | 24.9 | (1.3) | 8.2 | (2.9) | 16.7 | 0.1 | 8.5 | 0.7 | 8.1 | 0.0 |
| Return on revenue | |||||||||||
| Operating profit | % | 9.4 | (0.3) | 10.0 | 0.6 | 9.1 | (0.7) | 9.5 | (0.6) | 8.7 | (0.9) |
| Pre-tax profit | % | 12.3 | 0.5 | 13.0 | 1.5 | 12.0 | (0.0) | 12.4 | 0.5 | 11.6 | (0.7) |
| Net profit | % | 9.1 | 0.8 | 9.7 | 1.7 | 8.8 | 0.4 | 9.3 | 1.3 | 8.3 | (0.8) |
| Revenue by division | |||||||||||
| Automotive | W bn | 100,975 | 4.4 | 34,019 | 5.3 | 66,956 | 4.0 | 35,238 | 4.4 | 31,718 | 3.5 |
| Finance | W bn | 20,258 | 21.0 | 6,497 | 10.1 | 13,761 | 27.0 | 7,105 | 23.6 | 6,656 | 30.8 |
| Other | W bn | 7,375 | (2.5) | 2,412 | (13.5) | 4,963 | 3.9 | 2,678 | (2.1) | 2,285 | 11.8 |
| Op. profit by division | |||||||||||
| Automotive | W bn | 9,011 | – | 2,289 | (26.3) | 6,722 | (0.4) | 3,723 | (3.3) | 2,999 | 3.5 |
| Finance | W bn | 1,421 | 20.8 | 435 | 13.6 | 986 | 24.3 | 561 | 32.0 | 425 | 15.5 |
| Other | W bn | 1,004 | – | 876 | – | 128 | – | (5) | – | 133 | – |
Within the automotive division the profit performance was worse, as revenue grew by 5.3% but operating profit dropped by 26% and the margin fell a sharp 2.9 points to 6.7%. The finance division reported a 13.6% rise in operating profit.
Outlook
HMC’s start-of-year forecast said it expected the business environment would remain difficult to predict, due to macro uncertainties centred on emerging markets and a downturn in the real economy. It anticipated a negligible rise in wholesales to 4.24 million units. The company doesn’t have a great track record with its sales forecasts, having fallen short of its start-of-year forecast for nine successive years. Given that the 2024 forecast was unambitious, we thought that this might be the year the target is met or exceeded; but it is looking like a stretch.
Other full-year forecasts included revenue growth of 4-5% and an operating margin of 8-9%. It stuck with these forecasts at the time of announcing its Q3 results and it looks to have a reasonable chance of achieving them.
