Image source: Hyundai
What's going on?
South Korean carmaking giant Hyundai posted its best quarterly profit since 2014 on Thursday.
What does this mean?
The tail-end of last quarter wasn’t an ideal one for Hyundai, with strikes in South Korea making production next to impossible. But the carmaker hit upon a canny solution, reducing discounts on the vehicles it did have to sell. Drivers were especially keen on its highly profitable SUVs and luxury models, while booming sales of its flagship EV helped the segment’s total sales climb almost 50% from the same time last year. Throw in a fragile South Korean won that made its overseas earnings worth more, and Hyundai’s profit came in 56% higher last quarter. Better still, the carmaker said it’s finally seeing signs that chip and component shortages are letting up, and that it could step up production for the rest of the year as a result.
Why should I care?
The bigger picture: Hyundai’s a realist.
Still, Hyundai is more than aware of the challenges going forward. For one thing, there’s no guarantee that strong demand will stick around as interest rates tick up, which will make financing a car that much more expensive. Inflation isn’t going to help on the purchasing power front, either. And for another thing, the carmaker admitted it was expecting fierce competition to push up its marketing costs, and said it’ll have to foot the bill for higher salaries if it wants to prevent any more strikes.
Zooming out: The sky’s the limit.
Hyundai doesn’t just want to rule the road: it’s one of the first global carmakers to start developing flying taxis, arguing that its expertise in mass production, interior design, and customer experience will give it an edge (tweet this). The vehicles are expected to start test flights in 2025 and hit the US market by 2028, and Martin Scorsese’s long-awaited sequel – “Flying Taxi Driver” – is expected to follow shortly after.
Originally posted as part of the Finimize daily email.
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