Hyundai first-quarter profit tripled, to adjust production due to chip shortage

Hyundai Motor posted a first-quarter profit that almost tripled to its highest in four years as people purchased its luxury cars but warned it would have to adjust production again in May due to chip shortage.

Unlike its competitors, the automaker staved off production halts in the first quarter, due to its healthy chip inventory. But the shortage, exacerbated by factors such as a fire at a chip factory in Japan and storms in Texas, is now catching up with the automaker.

Hyundai, which together with affiliate Kia is one of the world’s top 10 automakers by sales, has temporarily halted production three times since the beginning of this month and saved chips for its best selling models.

“The condition of semiconductor parts is being a little more prolonged than we expected,” said Seo Gang-hyun, an executive vice president at Hyundai.

“As the semiconductor procurement condition is rapidly changing, it’s difficult to predict production status after May. We expect that there will likely be similar production adjustment in May, similar or more than what we had in April,” he said.

Net profit surged 187% to 1.3 trillion won ($1.16 billion) from 463 billion a year ago, when business declined as countries used lockdown measures to stop the spread of the coronavirus.

Kia reported operating profit of 1.1 trillion won for January-March, increasing 142% on the year.