Hyundai Motor Cuts Annual Outlook as Profit Slump Continues — Update

By Kwanwoo Jun

Hyundai Motor cut its full-year sales and earnings forecasts as a prolonged profit slump deepened, with weaker global demand and production losses from labor unrest weighing on South Korea's largest carmaker.

The disappointing results and dimmed outlook come as the automaker is struggling with slowing sales, higher raw-material prices and intensifying competition from Chinese rivals at home and abroad.

A series of union strikes also intermittently disrupted production and shipments at Korean plants earlier this year before the company reached a settlement in late August.

Sales declined in nearly all major global markets, except India and the U.S., where demand for Hyundai's hybrid models and sport-utility vehicles remained solid.

Citing the challenging business environment, Hyundai lowered its 2026 vehicle sales target to 4.0 million units from 4.16 million.

The company also cut its operating profit margin target for the year to 5.5%-6.5% from 6.3%-7.3% and reduced its investment plan to 16 trillion won from 17.8 trillion won.

The automaker said Thursday that net profit dropped 24% from a year earlier to 1.932 trillion won, equivalent to $1.44 billion, for the July-September period. That widely missed a FactSet-compiled consensus estimate of 2.406 trillion won.

Revenue fell 3.4% to 45.110 trillion won, while operating profit increased 5.5% to 2.677 trillion won.

Sluggish global demand and production disruptions were the main factors behind the weak results, Hyundai executives said on a conference call. A nonoperating foreign-exchange loss on foreign-currency assets also weighed on the bottom line.

Global wholesale vehicle sales declined 11% year over year during the third quarter. Retail sales were down by a similar margin, falling 10%.

Hyundai's performance was mixed in the U.S., as wholesale vehicle sales fell 9.9% but retail sales rose 3.5%.

India was a standout, with wholesale and retail sales climbing 19% and 9.5%, respectively.

In South Korea, both wholesale and retail vehicle sales fell 27%. The company attributed the decline to fewer working days because of holidays and strike-related production constraints, as well as intensifying competition.

"Chinese electric-vehicle makers and Tesla are rapidly gaining market share in South Korea," a Hyundai executive said.

Shares of the company erased their gains after the results, ending 1.2% lower. The stock is roughly flat this year, after months of steep declines wiped out early 2026 gains.

Amid the challenges, however, the company has bet big on physical artificial intelligence and robotics.

At home, Hyundai is pursuing a 9 trillion won AI hub in Saemangeum on the country's southwestern coast, part of a multibillion-dollar project in Korea. More than 60% of the investment is earmarked for an AI data center to support autonomous-vehicle development, with the remainder going toward facilities producing robot components, hydrogen energy and solar power.

Hyundai also plans to deploy Atlas humanoid robots developed by U.S. unit Boston Dynamics at its Georgia plant in 2028. The company aims to build a factory capable of manufacturing 30,000 robots annually.

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

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October 29, 2026 05:13 ET (09:13 GMT)