South Korea's Hyundai has today turned in its best quarterly profit in about six years, helped by solid demand for its high-margin sport-utility vehicles (SUVs) and its premium Genesis cars.
Hyundai, which together with affiliate Kia is among the world's 10 biggest car makers by sales, reported net profit of 1.8 trillion won ($1.57 billion) for the three months from April to June.
This compared to 227 billion won the same time a year earlier and also compared with an average analyst forecast of 1.6 trillion won compiled by Refinitiv SmartEstimate.
"Sales of SUV models and Genesis luxury brand models drove the momentum in sales volume, and declining incentives helped lift revenue and profitability in the second quarter as the ongoing recovery from the global Covid-19 pandemic spurred automotive demand," Hyundai said in a statement.
The strong result was also backed by Hyundai's conservative supply chain management, which has helped it navigate a global chip shortage better than many other automakers, analysts said.
But the prolonged shortage and other component supply issues have started catching up with Hyundai, disrupting its electric vehicle production in particular.
In April, Hyundai suspended production at a factory making the Ioniq 5 electric crossover because of chip and component supply issues.
It said today it expects on-year sales growth might slow in the second half of 2021 due to challenging business conditions, including raw material price fluctuation and unstable supplies of automotive chips.
The company also said it expects the global chip shortage to gradually become less acute in the second half of the year, adding that it is pursuing partnerships with major semiconductor companies to maintain stable supply conditions.
The Taiwanese chipmaker said the shortage in auto chips will gradually ease for its customers from the current quarter but expects overall semiconductor capacity tightness to extend possibly into next year.
Hyundai and its affiliates are in talks with local chip companies to reduce reliance on foreign supplies, Reuters reported last month.