Hyundai Profit Falls as Weak Auto Demand, Labor Unrest Weigh — Update

By Kwanwoo Jun

Hyundai Motor recorded weaker second-quarter net profit as vehicle sales declined amid cooling global demand, marking the latest setback for South Korea's largest carmaker.

The downbeat earnings come as Hyundai's unionized auto workers in South Korea are staging partial walkouts for a second straight week to demand higher wages, doubling strike hours to four per shift this week.

The union is also seeking job protections amid advances in artificial intelligence and robotics, opposing management's plan to begin deploying humanoid robots on assembly lines within two years.

Hyundai, the world's third-largest automaker by sales with sister company Kia, said it expects the challenging business environment to persist amid continued macroeconomic uncertainty and intensifying competition.

The automaker on Thursday said net profit declined 11% from a year earlier to 2.888 trillion won, equivalent to $1.96 billion, for the April-June period. That beat a FactSet-compiled consensus estimate of 2.661 trillion won.

Revenue rose 1.9% to a record 49.215 trillion won, while operating profit fell 21% to 2.851 trillion won, weighed down by sluggish car sales, higher raw-material costs and supply disruptions.

Brisk demand for hybrid vehicles and favorable foreign-exchange rates helped sustain revenue growth, despite lower overall vehicle sales during the quarter, Hyundai said.

Global vehicle sales fell 6.9% year over year in the three months ended June, resulting in a 4.9% decline for the first half.

Wholesale vehicle sales in South Korea and Europe slumped 16% and 11%, respectively, in the latest quarter. Supply disruptions caused by fires at some of Hyundai's contract auto-component makers hurt domestic sales, the company said.

Sales in the U.S., where demand for hybrid cars remained solid, rose 0.9%, while those in China plunged 37% as the Korean automaker continued to lose market share.

Analysts say a delayed recovery in global auto demand and a prolonged labor strike could weigh on Hyundai Motor, though the company's valuation remains supported by its aggressive AI and robotics push, which they view as a catalyst for the stock.

The carmaker earlier this month said it would acquire SoftBank's remaining stake in its U.S.-based robotics unit, Boston Dynamics. Hyundai has said it plans to deploy Atlas humanoid robots at its Georgia megaplant starting in 2028. The company aims to build a factory capable of manufacturing 30,000 robots annually.

In February, Hyundai unveiled a multibillion-dollar investment plan to advance physical AI in South Korea. It plans to build a roughly 9 trillion won AI hub in Saemangeum on the country's southwestern coast, earmarking more than 60% of the investment for an AI data center to support the development of autonomous cars. The rest will go toward facilities producing robot components, hydrogen energy and solar power.

Shares in Hyundai ended 3.3% higher after the results. The company's stock has climbed 46% this year, trailing the benchmark Kospi's 68% advance.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

July 23, 2026 03:02 ET (07:02 GMT)