Hyundai Motor said it ex-pects it will take a long time to get back to normal chip supplies after the auto-maker reported a net profit of $1.10 billion for the July-September quarter.
In the same period a year earlier the group, which includes Kia, posted a loss when it was hit by a one-time expense related to engine quality issues and recalls.
“Hyundai Motor expects that on-year sales growth might slow down for the rest of 2021 amid adverse business conditions caused The microchip crisis, trig-gered partly by surging de-mand for laptops and con-sumer electronics during the pandemic, has shuttered auto production lines globally and forced automakers to slash shipment forecasts.
Hyundai previously said its sales growth might slow in the second half due to chal-lenging business conditions, including the unstable sup-ply of automotive chips.
Analysis and comments from the automotive team at IHS Markit on last week’s proposed greenhouse gas emission standards an-nounced by the US EPA.
The company said it had cut this year’s capital expen-diture spending by more than 10 percent to 8 trillion won to better respond to uncertain-ties, including the coronavi-rus pandemic.
It revised up this year’s auto-business operating margin profit to 4.5 per cent to 5.5 per cent from a previously announced 4 per cent to 5 per cent, citing strong sales of its high-margin SUVs and its premium Genesis cars.
Lee Jae-il, analyst at Eugene Investment & Securities: “Based on Hyundai’s revi-sion of its operating margin targets, the upcoming fourth quarter results would likely mark the most profitable quarter this year as the com-pany seems to expect that the chip supply issues would likely improve.”
Hyundai had turned in its best quarterly profit in about six years in the April-June quarter thanks to its conser-vative supply chain manage-ment that helped it to navi-gate the shortage better than other automakers.