Hyundai Motor reported a smaller-than-expected drop in profit on high-margin domestic sales and said, while demand should pick up soon, the pace of recovery will be slow due to the impact of the coronavirus pandemic.
Hyundai, which together with sister company Kia Motors is the world’s fifth-largest carmaker, said weakness in both mature and developing economies means auto sales may only recover to 2019 levels around 2023.
“Auto demand is expected to pick up from the third quarter, but economic recession impact from Covid-19 and uncertainties around re-proliferation remain,” CFO Kim Sang-hyun said.
For April-June, Hyundai turned in an operating profit of 590 billion won (386.85 million pounds), driving its shares up 5%.
The results were buoyed by sales in South Korea, which rose 13% from a year earlier to 200,000 vehicles, led by demand for large cars and sport-utility vehicles such as the G80 and GV80 SUV from premium brand Genesis.
Hyundai’s global retail sales fell 33% for the period, which included double-digit percentage sales drops in markets such as the US, China, Europe and India.
South Korea has surpassed China and the US as the top market for Hyundai, after the country managed the Covid-19 outbreak better than others and extended car tax cuts.
Meanwhile, Daimler flagged signs of recovering demand for top-end Mercedes-Benz models and electric vehicles, sending its shares higher. CEO Ola Kaellenius said its Mercedes-Benz cars and vans division appeared set for a rise in 2020 operating profit.