Hyundai profit triples to $1.16bn as luxury demand picks up

Photo: AP

The South Korean carmaker Hyundai announced a robust growth of profits from sales in the first quarter of 2021, Reuters reported. The nearly triple surge in revenue or 187% on annualized basis is attributed to restored end-customer demand, especially focused on the luxury segment. That is the main factor behind the surge in sold volumes of the company’s flagship model Genesis. But still the carmaker sees a major challenge in the coming months amid a widening semiconductor chips shortage.

Hyundai, which together with affiliate Kia is among the world's top 10 automakers by sales, reported a net profit of $1.16 billion for the January-March period. Demand for Hyundai's pricier cars such as SUVs and the luxury Genesis model stood out in the first quarter. While major automaking rivals including Volkswagen and General Motors were forced to cut production due to the global shortage of semiconductors, Hyundai managed to stave off that in the first quarter thanks to its healthy chip inventory.

But the South Korean automaker too has begun to run out of semiconductors now, prompting it to temporarily pause production three times and save chips for its most popular models. Shares of Hyundai Motor, Asia's fifth-biggest automaker by market value, rose 2% after the results versus the broader market's 0.2% gain. The stock is the third-best performer so far this year among large Asian automakers, gaining nearly 20%.

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