Operator: Ladies and gentlemen, thank you for attending this conference call. We will now begin Hyundai Motor Company's business results conference call for the third quarter of 2026. Once again, the presentation materials can be downloaded from the Financial Supervisory Services electronic disclosure system at dart.fss.or.kr or from our IR website at www.hyundai.com. Joining us at this conference call are Executive Vice President Seung Jo Lee, the Head of Planning and Finance Division, Executive Vice President Zayong Koo, the Head of IR Division, Vice President Kyuseok Ahn of Finance and Accounting Subdivision, Michael Yoon, the Head of IR Group, and Vice President Youngseok Lee, the Head of Planning and Finance Division of Hyundai Capital. We will first have Hyundai Motor Company's presentation on the business results, followed by a Q&A session with the attending investors.
Michael Yoon: Those who have questions are advised to press the star button followed by number one after the presentation. Now we will proceed with the presentation by Michael Yoon, the Head of IR Group at Hyundai Motor Company. Hello, this is Michael Yoon, Head of IR Group. We will now begin Hyundai Motor Company's 2026 Q3 business results conference call. Today's presentation will be based on the 2026 Q3 business results presentation file currently posted on our website. This presentation includes quarterly highlights, sales performance, and profit analysis. For quarterly summarized cash flow statement and detailed regional sales breakdowns, please refer to the appendix. First, Q3 highlights. Despite a year-over-year decline in industry demand in the US, retail sales grew 3.5% year over year, and our market share in the US reached 6.6%, maintaining market share in the 6% range for six consecutive quarters.
Michael Yoon: Supported by robust demand, hybrids accounted for 18.2% of our global sales. In the US market in particular, the hybrid sales mix rose to 26.8%, continuing the growth momentum of hybrids. As such, despite a decline in global demand amid growing geopolitical uncertainty, we recorded an operating profit margin of 5.9% in Q3, representing improved profitability year over year. Next, the sales performance. In the third quarter of 2026, due to a decline in global industry demand and the impact of strikes, global wholesale decreased 11.3% year over year to 921,000 units, and retail sales totaled 931,000 units, down 10.1% YOY. Next, I will go over the details about our wholesales by key market. In the US, industry demand declined 1.3% YOY, while our wholesale volume decreased 9.9% to 232,000 units.
Michael Yoon: However, driven by strong sales led by hybrids and Genesis models, retail sales increased 3.5% YOY. As for electrified vehicles, hybrid sales increased 18.4% YOY and accounted for 26.8% of total sales. Supported by such solid retail performance, our market share in the US reached 6.6%, maintaining market share in the 6% range for six consecutive quarters. In Europe, reflecting short-term impact from the transition of our lineup towards electrified vehicles, sales decreased by 18%, totaling 123,000 units. However, through continued optimization of our product mix, the share of SUV sales expanded by 6.5 percentage points YOY to 76%, while electrified vehicle sales accounted for 52.9% of sales. Looking ahead, we will pursue a sales recovery in Q4, supported by the full-scale rollout of the IONIQ 3 and the launch of key models.
Michael Yoon: In Korea, with fewer working days due to the Chuseok holiday and production disruptions caused by labor strikes, sales decreased by 27.2% YOY to 131,000 units. However, with solid demand continuing, led by the Grandeur Hybrid, the hybrid sales mix expanded 3.7 percentage points to 29.4%. In Q4, we will pursue a sales recovery through production normalization and full-scale new model launches. Next, I will explain the sales analysis by vehicle segment. Global SUV sales, including Genesis, totaled 571,000 units, accounting for 62% of total sales. Hybrid sales increased 3.8%, continuing their growth, but EV sales decreased 9.2% YOY, and total electrified vehicle sales decreased 2.7% year over year to 245,540 units. This concludes the presentation on sales performance, and I will now continue on with the profits and losses. This page summarizes our income statement.
Michael Yoon: In Q3 2026, revenue decreased by 3.4% YOY to KRW 45.1 trillion, while operating profit increased by 5.5% to KRW 2.7 trillion. In the automotive division, due to production disruptions caused by labor strikes and lower sales under challenging market conditions, revenue decreased by 10% YOY. However, despite such lower sales, supported by favorable foreign exchange and contingency measures, operating profit in the automotive division increased by 24.8% YOY. In the finance division, revenue increased by 27.8%, driven by growth in the managed assets. Operating profit, however, declined 18.2% YOY due to higher operating expenses, including increased interest expenses. Net income decreased 24% to KRW 1.9 trillion. Next is the quarterly revenue and operating income analysis. Revenue benefited from favorable FX rates, contributing KRW 0.66 trillion, while decreased global wholesale resulted in a negative volume effect of KRW 3.44 trillion.
Michael Yoon: Additionally, higher incentives resulted in a negative mix effect of KRW 0.69 trillion. Despite higher revenue from the finance division driven by growth in managed assets, total revenue decreased 3.4% YOY. Regarding operating profit as shown on the slide, the negative volume and mix effects were offset by positive factors, including favorable effects and cost reduction from contingency measures. As a result, operating profit increased by 5.5% to KRW 2.7 trillion, with an operating margin of 5.9%. The last is the SG&A and net profit. Despite higher raw material costs, our Q3 cost of goods sold ratio decreased by 1.7 percentage points to 83.8%. SG&A decreased 19.2% to KRW 4.6 trillion, mainly due to lower sales warranty provisions resulting from the decrease in quarter-end exchange rates. However, non-operating income decreased by 71% YOY, and net profit decreased by 24.2% to KRW 1.9 trillion.
Seung Jo Lee: This concludes the presentation of the 2026 Q3 business results. Thank you. Next, Executive Vice President Seung Jo Lee, the Head of Planning and Finance Division, will assess the company's Q3 business results and updates of the 2026 annual guidance. Good afternoon. This is Seung Jo Lee, Executive Vice President and Head of Finance Division. I will now present Hyundai Motor Company's 2026 Q3 business performance, Q3 dividend, and the 2026 annual guidance update. Third quarter production fell well short of plan. Scheduled summer vacation and the Chuseok holiday reduced the number of working days compared with the same period last year, and the strike further affected output. Because of the production disruption caused by the fire at a parts supplier in the second quarter, our inventory was limited.
Seung Jo Lee: We planned to recover volume through higher production in the third quarter, but the reduced working days and the strike impact delayed that recovery. As a result, global wholesale sales volume decreased 11% YOY to approximately 920,000 units. The lower volume led to a 3% YOY decline in revenue to approximately KRW 45.1 trillion. Next, I would like to explain operating profit. Operating profit increased by approximately KRW 140 billion YOY to approximately KRW 2.7 trillion. This was achieved despite higher fixed cost per unit due to lower production, rising raw material costs, and increased incentives in key markets, which added pressure to profitability. Favorable foreign exchange effects, lower US tariffs driven by differences in tariff rates, and cost optimization activities offset these headwinds. The operating margin rose 0.5 percentage points to 5.9%.
Seung Jo Lee: Due to domestic plant production disruptions that continued from the second quarter through the third quarter, not only did domestic sales decline, but shipment volumes from exports to key markets also decreased. In addition, sales volume in the Middle East continued to shrink. The impact of these global volume declines amounted to approximately KRW 1.1 trillion YOY. Also, due to the prolonged Middle East conflict and inflationary pressures, we incurred a cost burden of approximately KRW 500 billion from higher raw material prices in the third quarter. To elaborate on raw material prices, as previously anticipated, major raw materials such as steel plate, aluminum, and plastic peaked in the second quarter and have since turned down.
Seung Jo Lee: However, even though prices are trending lower, the magnitude of the earlier price increase was significant, and with the resolution of geopolitical issues delayed, spot prices have remained at high levels since the second quarter and continue to be elevated. When considering the time for raw material sourcing from production, shipment, and sales before the impact takes lead time to be reflected in our financial results, the cost burden for the current quarter has increased due to past raw material price increases. For some raw materials, prices continued to rise due to expanding AI investment worldwide and ongoing geopolitical supply-demand issues. As a result, we expect the raw material cost burden to persist through the fourth quarter. However, to offset this cost burden, we pursued cost optimization activities, which offset approximately KRW 500 billion of the cost increase, including higher raw material prices.
Seung Jo Lee: In addition, although US sales volume declined YOY as lower global sales resulted from the production disruption, the US share of wholesale sales in Q3 exceeded 25%. Hybrid sales volume and share both increased YOY, and the mix effect in Q3 was slightly positive compared with the same period last year. With regard to foreign exchange, the Korean won has recently returned to a strengthening trend. However, the average exchange rate increased by KRW 38.1 YOY, resulting in a favorable average exchange rate effect of approximately KRW 500 billion. In addition, as the decline in the period-end exchange rate expanded the foreign exchange effect on the warranty provision, both the average and period-end exchange rates recorded positive foreign exchange effects. Next, I would like to discuss the Q3 dividend.
Seung Jo Lee: Under the Value-up program announced in August 2024, we plan to pay a quarterly dividend of KRW 2,500 per share for both common and preferred shares for Q3. The record date for the Q3 dividend is 30 November, and the dividend payout date is 30 December. Regarding our outlook for Q4, our utilization rate declined in Q2 and Q3 due to production disruptions at our domestic plants. As the vehicles produced during this period are sold in Q4, we expect the fixed cost burden per unit to increase. In addition, raw material prices remain elevated, and we expect the cost burden to continue in Q4. US tariffs remain in effect and geopolitical risks persist. As a result, we expect the global business environment to remain challenging.
Seung Jo Lee: However, although the launch time of some models has been adjusted due to impact and other factors, domestic plant production has returned to normal since September. In particular, we anticipate improved product mix driven by the growing share of hybrid vehicles, including expanded sales of key new models such as Avante, Tucson, GV90, as well as GV80 hybrids. In addition, through continuous cost competitiveness improvement initiatives and reduced incentives following new model launches, we plan to pursue company-wide efforts to minimize cost burden and improve profitability. I will now walk you through the updates of the 2026 annual guidance update. We have revised our 2026 global wholesale target to 4 million units, down from our previous target of 4.1 million units.
Seung Jo Lee: This adjustment reflects lower production in our domestic plants due to labor strikes and parts supply disruptions, resulting in reduced export volumes to key markets, as well as weaker sales in the Middle East amid continued geopolitical uncertainty. In Q4, we plan to expand supply to major markets as domestic plant operations return to normal. We will also accelerate the production and sales of new models whose launches have been delayed. For 2026, we are maintaining our consolidated revenue growth guidance at 1% to 2%, unchanged from our previous outlook. Lower global wholesale volumes and a weaker Korean won to USD exchange rate are expected to weigh on revenue growth. However, we expect part of this impact to be offset by solid demand in North America and continued growth in hybrid vehicle sales. Now let me turn to our operating profit margin outlook.
Seung Jo Lee: Since the announcement of our initial guidance at the beginning of the year, geopolitical uncertainties, including the US-Iran conflict, resulted in higher raw material costs and increased cost pressures. In addition, as previously mentioned, a supplier fire in Q2 and labor strikes that continued into Q3 led to production interruptions at our domestic plants. The declining Korean won to USD exchange rate has also negatively impacted profitability. Moreover, production disruptions delayed the mass production and launch schedule of certain new models. As a result, the anticipated volume and earnings contribution from new vehicle launches is now expected to materialize later than originally planned. Taking into account these changes in both internal and external operating environment, as well as our YTD performance and outlook for the remainder of the year, we have revised our 2026 operating margin guidance to 5.5% to 6.5%.
Seung Jo Lee: We also note that recent guidance updates from major global automakers point to a similarly uncertain operating environment. Although the degree of impact varies by company and region, many automakers are facing intensifying competition, including the growing presence of Chinese OEMs in the European market, and some have revised their full year outlook downward to reflect these changes. This revision does not reflect any deterioration in our fundamental business competitiveness or earnings-generating capabilities. Rather, it primarily reflects the need to incorporate in our full year outlook the cumulative impact of factors largely outside our control. We remain confident in the underlying strength of our business and our ability to deliver sustainable long-term value. For the Automotive division, we have revised our investment plan to KRW 15 trillion, down from our previous target of KRW 17.8 trillion.
Seung Jo Lee: While maintaining critical R&D investments to secure future competitiveness, we will review investment priorities and execution time to improve capital efficiency. As a result, we plan to optimize investment by approximately KRW 1.8 trillion, primarily through capital expenditure management. With respect to free cash flow, we intend to maintain our existing guidance range of -KRW 0.5 trillion to +KRW 0.5 trillion. Next, Vice President Youngseok Lee, the head of Planning & Finance Division of Hyundai Capital, will assess the Q3 results for the finance businesses. Although profitability faced challenges in Q3 as external uncertainties persisted, including prolonged instability in the Middle East and rising interest rates, Hyundai Capital and Hyundai Capital America stably maintained a high-quality auto finance portfolio based on the close collaboration with the group. Now let me walk through the details. First, Hyundai Capital.
Youngseok Lee: Leveraging our stable funding base, we continued to support group's vehicle sales financing, and the share of automotive finance remained at 80% of total earnings assets in Q3. New vehicle financing declined due to an unfavorable operating environment, including lower vehicle deliveries, higher market interest rates, and intensified competition in the auto finance market. However, we selectively expanded corporate finance to diversify our portfolio and secured additional profitability, and earning assets grew 2.4% YOY. In addition to new vehicle installment financing, our flagship product, we gradually expanded leasing and corporate finance, increasing our asset base. The resulting rise in interest income led to 2.8% increase in operating revenue. On the expense side, we offset much of the impact of rising interest rates by diversifying our funding portfolio. However, interest expense increased due to higher borrowing driven by asset growth.
Youngseok Lee: Reflecting higher credit costs from proactive provisioning for corporate finance and larger provisions for liability in light of the softening used car market, operating expense rose 5.8% YOY. As a result, operating profit declined 26% and pre-tax profit declined 25%. Our Australian and Indonesian subsidiaries, which are at a relatively early stage of business, are also gradually stabilizing their business foundation through continued asset growth and reduction in initial losses. Moreover, we have successfully launched our India finance subsidiary in August this year and began offering dealer financing. Going forward, we will expand our business scope in stages in line with local market conditions. At Hyundai Capital, we expanded financing presence into Hyundai Motor's key strategic markets and strengthened the global sales financing capabilities. In Q4, financial market volatility and economic uncertainty are expected to persist due to geopolitical risks, rising interest rates, and exchange rate fluctuations.
Youngseok Lee: Hyundai Capital will defend profitability through flexible funding and origination strategy tailored to market conditions and continued cost management. Next is Hyundai Capital America. Despite challenging market conditions in Q3, including weakened US auto consumer sentiment, HCA maintained a high penetration rate supported by the group's solid sales and earning assets grew 5% YOY. Driven by stable asset growth and higher lease income from rising average vehicle selling prices, operating revenue increased 24%. Operating expenses increased 26%, mainly due to higher interest expense and lease depreciation as managed assets grew, as well as higher losses on used car sales due to lower used car prices and higher return rates. Although the delinquency rate rose slightly with heightened macroeconomic uncertainty and slowdown in the US economy, we are strictly managing a high-quality portfolio with prime customers at around 90%. Reflecting these, operating profit and pre-tax profit declined 22%.
Youngseok Lee: In Q4, uncertain market environment is expected to continue due to US inflationary pressure and persistently high interest rates. However, despite recent interest rate volatility, US capital markets continue to offer favorable funding conditions, and HCA also successfully completed a $1.5 billion funding transaction last September. Backed by ample liquidity of $19 billion as of the end of September and a high-quality asset portfolio, HCA will respond flexibly to future markets. This will conclude the presentation of the financial business. Now we will take questions.
Operator: 지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. Now Q&A session will begin. Please press star 1, that is star and 1, if you have any questions. Questions will be taken according to the order you have pressed the number star 1. For cancellation, please press star 2, that is star and 2 on your phone. 처음으로 질문해 주실 분은 유안타증권의 김용민 님입니다. The first question will be provided by Yongmin Kim from Yuanta Securities. Please go ahead with your question.
Yongmin Kim: 네, 안녕하세요. 유안타증권 김용민입니다. 질문 기회 주셔서 감사합니다. 금융 부문에 대해서 여쭤보고 싶은 게 있습니다. 원래 과거에는 4분기에 금융 부문 매출이 계절적으로 조금씩 내려오는 모습을 보이다가 24년 4분기부터는 전 분기 대비해서 계속해서 의미 있는 성장을 보여왔고, 매출액 자체도 계속해서 확대가 되어 왔는데. 4분기에 대해서 예측을 함에 있어서 최근에 환율 변동성이 너무 크고, Hyundai Capital America 쪽에서의 매출 성장폭이 너무 크다 보니, 결국 드리고 싶은 질문은 금융 부문에 있어서 환율 변동이 매출이나 손익에 영향을 미치는 게 어느 정도인지, 그리고 3분기에 수익성이 조금 저조한 것도 아메리카 쪽에서 변동성이 있는 것 같은데, 이게 차 가격 하락이나 아니면 이자 비용 이런 부분에서 어떤 요인이 가장 큰 영향을 미쳤는지 답변해 주시면 감사하겠습니다.
Yongmin Kim: Thank you. I am Yongmin Kim from Yuanta Securities. My question is for Hyundai Capital. Usually, I think your sales has more seasonality. As of 2024 Q4, you had shown meaningful growth quarter on quarter, and your sales have been expanding continuously. However, your Q4 outlook for this year, I think it may be due to the big fluctuation of foreign exchange rates and also maybe the big sales of HCA. But how much impact is taken by these FX rate in your finance business to your sales and also your profit and losses? Because your Q3 numbers do not seem that good. Is it mostly because of the US? Or what is the biggest accountability in terms of these results? Is it the car prices or maybe the interest rates?
Zayong Koo: 네, 이 질문은 캐피탈 재경본부장께서 해주시면 감사하겠습니다.
Youngseok Lee: 네, 캐피탈 재경입니다. 두 가지 질문을 주셨는데요. 4Q의 실적 환율에 따라서 매출과 손익에 영향이 어떻게 되냐, 그리고 3분기에 손익 저조 요인이 차 가격의 인하에 있냐, 아니면 이자 비용 증가에 있냐, 이 두 가지 질문을 주셨는데요. 첫 번째, 환율에 대한 4Q에 대한 영향은 아마 현대차의 실적 환율 영향하고 동일하게 가는 걸로 이해하시면 되고요. 3분기의 손익 저조 요인은, 저희가 ALM 비율을 부채와 자산을 같이 동일하게 매칭시키다 보니까 이해하시다시피 장기 금리가 좀 많이 올라가 있는 상황이라 이자 비용이 조달 코스트 영향을 많이 미쳤고요. 두 번째는 중고차 지수가 EV 위주로 하락하다 보니 반납되는 차량의 매각 손실이 반영됐다고 보시면 됩니다. 또한 이자 비용이 오름에 따라 연체율도 상승 중에 있고요. 그에 따른 크레딧 코스트도 조금씩 상승되고 있는 요인으로 보시면 됩니다.
Youngseok Lee: Thank you for your question. As far as I understand, I think you had two questions. First was regarding the profit and why it has deteriorated in Q3, and also how the FX rate will be affecting the sales and the P&L for Q4. To answer your first question, yes. Our profitability has gone down for Q3. Was it because of the car prices or because of the interest? I think that was your question. I am sorry. I will first answer regarding your Q4 impact of the FX rate. I think it pretty much follows the earnings of HMC, so we are pretty much in line with the way HMC is headed. As for the deterioration of P&L for Q3, we try to match our debt rate as well as our capital rate.
Youngseok Lee: Because the long-term interest rate has gone up, that has also resulted in the interest cost for us. I think that was the biggest impact in these deteriorated results. Also, another part would be the used car rate. We have seen some losses in selling the cars that have been returned. Because of higher interest, the delinquency rate has also gone up, impacting our cost. Thank you.
Seung Jo Lee: 추가적으로 말씀을 드리면, 판매 입장에서 볼 때는 판매가가 떨어졌다거나 그런 건 아니고요. 가격 인하가 있었다는 건 없고, 3분기가 전체적으로 저희 현대 입장에서 보면 전체 도매 판매가 그렇게 많지 않았습니다. 조금 줄어든 것도 있고요. 그 영향이 전체 매출액의 영업 수익에 영향을 미친 게 있는 것 같고. 그다음에 아까 Capital 쪽에서 설명한 것처럼 연체율이라든지 대손 비용, 그다음에 그런 비용에 대해서 아마 9월 말에 추정을 해서 추세를 반영하다 보니까 그 부분에 대해서 영향을 좀 받은 것 같습니다.
Seung Jo Lee: If I could add on to that, the prices have not actually changed that much. So that is not really a factor impacting our sales. But overall for Q3, the whole sales have not changed that much, maybe gone down a little bit. But I think for the finance business, the impact was to do with the sales profit and also the delinquency rate and the delivery fee that gone up as Hyundai Capital explained. I believe that they have reflected that trend to the end of September numbers, resulting in such numbers. Thank you.
Seung Jo Lee: 네, 다음 질문 받겠습니다.
Operator: 다음으로 질문해 주실 분은 삼성증권의 임은영 님입니다.
Operator: The following question will be presented by Eunyoung Lim from Samsung Securities. Please go ahead with your question.
Eunyoung Lim: 여보세요?
Seung Jo Lee: 네, 말씀해 주세요.
Eunyoung Lim: 안녕하세요. 질문 기회 주셔서 감사합니다. 삼성증권 임은영입니다. 저 두 가지 질문드리고 싶은데, 예전에 2024년에 저희 CEO Investor Day 하실 때 향후 4년간 자사주 4조 원 매입하셔서 소각한다고 말씀해 주셨는데, 지금까지 한 7천억, 8천억 정도 사신 것 같아서, 이게 내년까지 정책이 계속 이루어질 수 있을지 그 가능성에 대해서 여쭤보고 싶고요. 두 번째는, 아까 영업이익 증감 쪽에서 기타 부분이 많이 올라온 걸로 보이는데요, 6,400억 정도? 이거는 다 원가 절감 활동이라고 봐야 될까요? 설명 부탁드립니다. 감사합니다.
Eunyoung Lim: Hello. I am from Samsung Securities. I have two main questions. First, in the 2024 CEO Investor Day, you said that for the next 4 years, you are going to repurchase and cancellation the stocks, and I believe that amount is about KRW 700 billion and KRW 800 billion. By next year, I just want to know if that policy is going to be coming into a reality. The second question is, in the operating revenue, I saw that there was other area that showed an increase, which was about KRW 640 billion. Was that part of the cost reduction activity? These would be the two main questions.
Seung Jo Lee: 첫 번째 질문에 대해서 답변을 드리겠습니다. 저희가 2024년도에 4조 원 규모의 자사주를 매입을 하겠다, 이렇게 말씀을 드렸었는데요. 2024년 이후의 경영 환경이 굉장히 많이 변했습니다. 저희가 예측하지 못했던 관세가 부과가 됐고요. 그 관세만 해도 작년에도 말씀드렸지만 작년 효과가 약 4조, 올해도 그 정도 수준을 예상하고 있습니다. 그래서 경영 환경이 똑같았으면, 지금 상황에서는 이런 달라진 경영 환경 등을 고려해서 어떤 게 최선의 방법인지를 고민하고 있습니다. 그래서 아마 저희가 고민해서 완료가 되면 주주들하고 소통할 수 있도록 하겠습니다.
Seung Jo Lee: To answer your first question, in 2024, we said that we are going to repurchase KRW 4 trillion amount of stock, but after 2024, the business environment changed. One of the main reasons were because of the tariff. The tariff amounted up to KRW 4 trillion last year, and we believe it is going to be similar this year as well. Considering the changing business environment, we are not sure what the best solution would be. We are taking that into consideration. If we have and come up with a solution, we will make sure that we can communicate that with the stockholders.
Seung Jo Lee: 두 번째 질문 말씀드리겠습니다. 기타 부분이 많다고 말씀하셨는데 저희가 원자재값 인상이라든지 계속해서 분기마다 말씀드렸는데 매월이 contingent입니다. 그래서 계속해서 비용 절감을 최적화하고 있고 그다음에 재료비 절감을 할 수 있는 부분을 지속적으로 발굴해서 지금 원가 절감을 하고 있고요. 그 원가 절감 효과는 아마 4분기에는 더 커질 것으로 예상을 하고 있습니다.
Seung Jo Lee: For the others aspect, I always talk about this every quarter, but every month we are going through contingency measures, and we are coming up with optimization plans. We are continuing the cost reduction activity. We are also going to continue the cost reduction activities throughout Q4, and we believe that amount is going to increase in that quarter as well.
Seung Jo Lee: 네, 다음 질문 받겠습니다.
Operator: 다음으로 질문해 주실 분은 메리츠증권의 김준성 님입니다. The following question will be presented by Jun Sung Kim from Meritz Securities. Please go ahead with your question.
Jun Sung Kim: 네, 안녕하세요. 메리츠 김준성입니다. 질문 기회 주셔서 감사합니다. 두 가지 여쭤보고 싶은데요. 조금 전에 삼성증권에서 임은영 위원님이 질문 주셨는데, 제가 답변이 정확히 된 건지 잘 헷갈려서 다시 여쭤봅니다. 이번 3분기 실적에서 영업외 손익에 보면 기타 부분이 굉장히 많이 감소했는데 이게 어떤 특정한 이유가 있는지, 환율에 의한 기말 환율 변동에 의한 자산 평가 손익인지 아니면 그 밖에 어떤 특정 사유가 있는지 조금 구체화를 해주시면 추정에 도움이 될 것 같고요. 나머지 질문 두 가지를 드리면, 주주 환원 관련해서 저희가 이전 년도, 직전 년도에 그 전년도와 비교했을 때 손익이 관세 등의 영향으로 줄어들면서 주주 환원의 두 가지 방법 중에 자사주의 경우에는 1.5조 원 매수에서 0.5조 원으로 거의 60~70%를 줄였고, 배당의 경우에는 3조에서 2.5조 정도로 좀 덜 줄였던 약간 상이한 대응 전략을 가져가셨는데. 향후에 저희가 주주 환원을 전개함에 있어서 만약에 손익의 감소 추세가 이어진다고 한다면 배당을 자사주보다 더 우선할 것인지 그 부분이 좀 궁금합니다.
Jun Sung Kim: 작년의 경우에는 자사주보다 배당을 좀 더 우선시했고 배당이 좀 더 지켜지는 모습이었고, 향후에도 배당을 좀 더 지켜가는 전략으로 가져가실지가 저는 궁금하고요. 두 번째는 판매에 대해서 여쭤보고 싶은데, 내수 시장에 대해서 궁금합니다. 내수 시장에서 저희가 파업 영향도 있지만 사실 중국산 자동차의 점유율이 10%를 초과하기 시작하면서 위협이 되고 있는 모습으로 보여집니다. 그래서 저희가 CEO Investor Day에서 "신차 출시 계획이 굉장히 강하게 있다. 지금 현재 한 50여 종의 차종을 판매하고 있는데 2030년까지 100여 종으로 차종을 늘려가면서 판매 부스트를 하겠다"라는 얘기를 주셨었는데, 이 내수 시장에서 내년에 장안자동차나 체리자동차나 샤오펑이나 지커 등이 추가로 출시가 되면서 위협이 커지는 환경 속에서 저희의 대응 전략, 신차를 어떻게 출시하실 것인지, 어떤 차들이 나오는지, 그 가격 정책은 어떻게 가져가실 건지, 혹시 내부에서 좀 고민하고 계신 이 어려움에 대한 타개책을 공유해 주시면 추정에 도움이 될 것 같습니다. 감사합니다.
Jun Sung Kim: Thank you for giving me the opportunity. I just want to clarify the answer that you've given to the previous question with Samsung Securities, because the other part in Q3 for non-operating P&L had gone down. So what was the exact reason for that? Is that the term and FX rate or some other reason? So I just want to clarify that. As for myself, I have two questions. First is the shareholder return policy. Compared to 2024 and 2025, you have given two tracks that you're going to take. First is regarding the buyback of treasury stocks. Second was through the dividend payout. As for the treasury stock, your plan was originally from KRW 1.5 trillion, which had been downsized to KRW 0.5 trillion. So about maybe 60% to 70% of your original plan. As for the dividend, it had been changed from originally KRW 3 trillion to KRW 2.5 trillion.
Jun Sung Kim: So if the P&L continues to deteriorate in the future, will you still be holding more importance to dividend over the treasury stock buyback as you had shown in the previous years? My second question is regarding your sales in the domestic market. With the Chinese makers now, the market share becoming over 10%, they're pretty much becoming a big threat. And during the CEO Investor Day, you said that you had a big plan for launching new vehicles and models. Currently, you are selling 50 models, and by 2030 you are saying that you're going to expand this number up to 100 models. However, as of next year and the oncoming years, big Chinese brands such as Deepal or Chery, they will continue to come into the Korean market and become a big threat. So what is the response that you have in your pockets at the moment?
Jun Sung Kim: What models do you have planned to launch? At what price strategy? How are you planning to respond to these challenges?
Seung Jo Lee: 첫 번째 질문에 대해서 말씀드리겠습니다. 영업외 수익, 손익 항목이 왜 전년 동기 대비해서 많이 떨어졌느냐. 첫 번째 이유로는 저희가 외화 자산, 매출 채권을 갖고 있었는데 3분기에 급격하게 환율이 하락을 했습니다. 그래서 외화 환산 손실이 많이 발생을 했고요. 또 한 가지는 저희가 지분법 평가를 하게 되어 있는데, 저희가 지분을 보유한 회사들의 3분기 실적이 작년보다 그렇게 좋지 못했기 때문에 그 두 가지 이유로 작년보다 대폭 줄었습니다.
Seung Jo Lee: If I could clarify on the repeated question. You are saying that there was a big drop in our non-operating profits and losses compared to the previous year. I think there would be two big reasons for that. First is regarding our foreign currency assets. With the FX rate dropping significantly in Q3, the exchange rate loss has become a reason for that. Secondly, because of our share-based evaluation, many of the companies that we have stakes in, their performance in Q3 were not that good. That was reflected in the numbers.
Seung Jo Lee: 첫 번째 질문 중에서 지분법으로 차이 나는 부분은 제가 비중을 말씀을 안 드려가지고 혹시 굉장히 반반으로 생각하실지 모르겠는데 그건 아니고요. 지분법 쪽에서 차이 나는 건 그리 크지 않고, 대부분은 환산하고 외환 거래에서 난 매출 채권을 인식할 시점하고 진짜 매출 채권을 회수하는 시점에 환율 차이로 인해서 외환 거래 환차손이 생긴 겁니다. 다 외화 관련해서 급격한 원화 하락으로 발생한 거라고 보면 됩니다.
Seung Jo Lee: Just to further clarify, just because I mentioned about the stakes that we have of our affiliates, because of the equity method, that really does not take a big portion of the drop in these numbers. Mostly, it is due to the FX rate. The foreign exchange rate has dropped significantly. That has come from the losses. The losses come from the FX rate.
Seung Jo Lee: 두 번째 질문 말씀드리겠습니다. 두 번째 질문이 주주 환원과 관련해서 자사주하고 배당에서 비슷한 수준은 아니지만 어느 정도 균형이 있었는데, 지금 올해로 오면서부터는 전년도에는 배당은 거의 2조 6천억 원 이 정도 수준을 저희가 하고 있습니다. 그다음에 나머지 TPR 35%를 맞추기 위해서는 자사주 소각을 하고 있는데, 그 부분에 대해서 앞으로도 어떤 방향성을 갖고 할 거냐. 저희가 CEO Investor Day 때 24년도 Value-up 프로그램에 최소 배당금 1만 원을 하겠다고 발표를 드렸고요. 거기 TPR 35%를 하겠다는 말씀을 드렸습니다. 그거에 대해서 아까 자사주 매입까지 임정욱 위원님께서 말씀을 주셨는데, 전체적으로 저희가 Value-up 프로그램을 지금 시점에서 경영 환경이 변화된 상황을 반영해서 어떻게 하는 게 주주 가치 제고에 부합하는지를 고민하고 있습니다. 그 고민이 주주들하고 소통하기 전까지는 저희가 시장하고 약속한 최소 배당금 1만 원은 지켜야 될 것 같고요. 그 고민이 끝나는 시점에서는 전체적인 주주 환원 제고하는 그런 계획을 공유하도록 하겠습니다. 시장에서는 배당하고 어떤 균형도 요구하는 걸로 알고 있는데요. 그런 부분 저희도 잘 알고 있고요.
Seung Jo Lee: 전체적으로 시장의 의견 잘 들어보고, 주주들의 의견 잘 들어보고, 잘 정리하도록 하겠습니다.
Seung Jo Lee: Moving on to your second question for the shareholder return policy. We do understand that previously, the treasury share buyback and the dividend payout had been somewhat balanced, but as of this year, we needed to meet the TPR of 35% while also giving a payout of KRW 2.6 trillion so far. I believe you are wondering what our future direction is going to be, what our direction is going to be. As we have the Value-up program that we had announced in 2024 during our CEO Investor Day, we promised to keep a TPR of 35% and to give a minimum of KRW 10,000 to our shareholders. However, as the business environment has rapidly changed, we still do need to keep up to the promise that we have made. We are still looking into how we can improve the value for our shareholders.
Seung Jo Lee: Until that plan is finalized and communicated with our shareholders, we do believe that we have to keep the promise of KRW 10,000. We know that there is a strong voice in the market for the buyback and the dividends ratio to be balanced out. Until we have come up with a concrete plan to do this, we will keep our ears open to listen to the voices of the market and the shareholders.
Seung Jo Lee: 세 번째 질문 말씀드리겠습니다. 중국 전기차, 특히 테슬라라든지 이런 부분이 상당히 국내 시장 market share를 발 빠르게 점유를 해가는 건 맞고요. 거기에 대응해서 저희도 여러 가지를 대응을 하고 있는데, 기본적으로 국내에서 대응을 해왔던 거는 저희는 테슬라나 타 중국 OEM들이 하는 것처럼 가격을 수시로 조정하는 거는 중고차 가치나 고객에 대한 약속을, 고객 가치를 저해하는 방법이라고 생각해서 저희가 지금 할부 경쟁력, 현대캐피탈도 지금 나와 계시지만 서로 할부 경쟁력을 제고할 수 있는 방안. 타 중국 OEM들은 할부 경쟁사를 갖고 있지 않습니다, captive를. 그래서 저희는 잔존가치 유예할부라는 거를 통해서 월 납입금을 중국 업체들이 따라오지 못할 정도로 낮게 운영을 하고 있습니다. 그런 식으로 지금 시장을 방어하고 있고요.
Seung Jo Lee: Moving on to your final question. We do know that the Chinese EVs and Tesla, they are really rapidly expanding their presence in the domestic market in terms of shares. We have a lot of measures in place to defend our market share. We are not going to frequently fluctuate our prices as Tesla or other Chinese OEM does, because we believe that measure will damage the residual value of our used cars as well as the value of our customers. But we do have in our hands the competitiveness in terms of installment payment, as Hyundai Capital had also just mentioned. Because this is our strong suit compared to other OEMs, we have significantly lowered the monthly installment paid for these cars. That in turn also protects the residual value of our vehicles.
Seung Jo Lee: 그다음에 또 저희가 중국 업체하고 지금 초격차를 벌려 놓고 있는 부분이 서비스 네트워크 기반의 EV 고객 케어 차별화입니다. 저희는 EV 서비스 거점이 내수에는 한 1,000개가 넘게 있습니다. 테슬라는 아마 17개 정도가 있는 걸로 알고 있고요. 그래서 거점당 누적 등록 대수 기준으로 보면 저희는 거점당 한 290대 정도 되고요. 테슬라는 거점당 12,000대 정도가 넘습니다. 그리고 사고 수리 리드 타임 또한 저희는 입고해서 사고가 났을 때 출고하는 데까지 걸리는 시간이 일주일 이내, 5일 정도에서 지금 더 줄이고 있고요. 테슬라는 일주일 이상, 한 2주 가까이 걸리는 걸로 알고 있습니다. 부품 같은 경우에도 저희 당사는 한 시간 이내에 수급을 하는 걸 목표로 하고 있고 그렇게 되고 있고요. 한 시간 이내가 한 92%, 그다음에 하루 이내로 다 부품이 수급되는 게 아무리 늦어도 99% 정도 되는데, 테슬라는 이보다 더 길게 몇 주, 1에서 2주 정도 소요된다고 해서 이 부분을 저희가 고객에 대한 소구 포인트로 지금 하고 있습니다.
Seung Jo Lee: Another strong point that we have, which significantly differentiates us from our competitors, especially Chinese OEMs and Tesla, is our service network, especially for EVs. In Korea, we have our service points maybe over 1,000 bases, whereas Tesla, we understand they only have 17. If you look at the number of registered vehicles per service centers, for us, it is about 290 vehicles per base, whereas Tesla, each service base is registered with about 1,200 units. The lead time for repairs for us from when the car comes into the garage to leaving all fixed, it takes less than a week, on average, five days. For Tesla, it takes more than two weeks. In terms of procuring the parts, we target to get it within an hour, and about 92% of the cars that come into our service centers get their parts within an hour, and within a day, 99%.
Seung Jo Lee: Whereas Tesla, it takes over a week or two.
Seung Jo Lee: 추가적으로 신차 문의가 있으셨는데요. 국내에서 신차는 지금 아반떼, GV80 하이브리드, 4분기에는 아반떼 하이브리드, 그다음에 투싼, GV90, G80 하이브리드, 또한 산타페 부분 변경 모델, 또한 12월 정도가 될 것 같은데요. 그다음에 제네시스 페이스리프트 모델, 제네시스 G90입니다. 이 모델이 나올 예정이고요. 북미 같은 경우에는 4Q에 투싼, GV80 하이브리드, GV90은 아마 내년 초 정도가 될 것 같고요. 유럽에서는 저희 아이오닉 3가 지금 판매가 개시가 됐고요. 그다음에 4Q에는 유럽의 전용 주력 모델인 투싼, 그다음에 베이온 이런 모델이 나올 거고요. 중국 같은 경우도 아이오닉 V, 지금 4Q에는 그다음에 인도 같은 경우에는 베이온, 그다음에 아이오닉 P 이런 부분이 아마 출시가 될 예정으로 알고 있습니다. 신차 출시는 저희가 그때 말씀드린 것처럼 연도별로 계획이 많이 돼 있고, 어떻게 보면 약간 너무 많다는 생각이 들 정도로 신차 출시가 계속 나올 거고요. 또 관심 있게 질문해 주신 게 판매 가격이나 이런 부분에 대해서 여쭤보셨는데, 가격은 저희가 가격 결정을 할 때는 저희 원가도 보지만, 시장.
Seung Jo Lee: 그래서 경쟁자하고의 비교, 그다음에 소비자들의 사전 조사에 의한 가격 수용 여부, 이런 것들을 다 고려해서 결정을 합니다.
Seung Jo Lee: You also mentioned about the new cars that are to be launched. We have Avante as well as GV80 hybrid coming up. In Q4, we have Avante hybrid, Tucson, GV90, G80 hybrid, and Staria facelift coming up as well. In December, I think, it is planned Genesis facelift and G90 as well. For North America, in Q4, we have Tucson, GV80 hybrid. GV90 will probably come out to the market early next year. As for Europe, we have IONIQ 3, which sales have already started. In Q4, the flagship model there is Tucson that is coming up. There is also Bayon. China, we have IONIQ V that is coming. India, we have Bayon and IONIQ P. So we have the launch plan of new cars by each year. There is a lot coming down the pipeline.
Seung Jo Lee: Maybe you could say it is too much, but we do have a lot of cars that is on the wait list. For the prices, there are a lot of factors that are considered to decide a price, but we do not just look at the cost itself. We also look at how we can compete with the competitors in the market, as well as taking a pre-survey to see how acceptable it is by the consumer.
Seung Jo Lee: 네, 감사합니다. 시간 관계상 마지막 질문 받도록 하겠습니다.
Seung Jo Lee: Thank you. Due to the time constraint, we will take one last question.
Operator: 마지막으로 질문해 주실 분은 키움증권의 신윤철 님입니다.
Operator: The last question will be presented by Yoonchul Shin from Kiwoom Securities. Please go ahead with your question.
Yoonchul Shin: 네, 질문 기회 주셔서 감사합니다. 키움증권 신윤철입니다. 두 가지 질문드리겠습니다. 영업이익은 일단 기대치를 상회했는데 수익이 기대치를 하회했고, 크게 아까 한번 설명 주신 영업외 손익, 기타 손실 5,600억 원이랑 그리고 이번에 법인세가 1조 원 가까이 되십니다. 이게 지난 4개년 정도에서 분기 법인세율 관점에서 봤을 때는 아주 이례적으로 높은 편이라서 이게 어떤 배경이 있으셨는지, 그리고 혹시 4분기에 평탄화가 가능한 건지가 첫 번째 질문입니다. 그리고 두 번째 질문은 최근 한국 금융당국에서 분할 법인이 아닌 해외 자회사 상장도 중복 상장에 해당된다고 유권 해석을 한 사례가 있고, 또 IPO가 공식 철회되고 있는 케이스가 발생을 하고 있습니다. 그래서 현대차에 질문을 드리고 싶은 건 인도 법인 상장 경험이 있으시다 보니까 혹시 이번 금융당국 유권 해석이 향후 현대차그룹 추가적인 해외 자회사 IPO 추진에 영향을 줄 여지가 있다고 평가하시는지 궁금합니다. 감사합니다.
Yoonchul Shin: Thank you. My name is Yoonchul Shin from Kiwoom Securities. I have two questions. First, your operating profit, despite it going up year-on-year, your non-operating P&L, within that, it shows that the corporate tax is approximately KRW 1 trillion. It is pretty high compared to the previous years. Is there a big reason as to why the corporate tax is that high? Do you have any plans to lower that down, to balance that down in Q4? Second question is regarding the IPO that Korean companies are doing in the overseas market. Because of regulations that bans duplicated listing, some of the companies are now canceling their plans to go public. Hyundai Motor Co, you have experience in going public in the Indian market.
Yoonchul Shin: So, do you have any tips, I suppose, regarding I mean, is there something that you can do regarding. So what is your opinion on the recent regulation regarding this ban?
Seung Jo Lee: 네, 첫 번째 질문에 대해서 말씀드리겠습니다. 지금 말씀드린 거는 영업외 손실, 크게 말씀하셨고, 그거 외에 법인세 비용이 전 분기 대비해서 1조 원 수준으로 약간 높다고 말씀하셨는데 이건 특별한 이유가 있는 건 아니고요. 법인세율이 다른 법인들의 믹스가 변동이 있어서 그런 건데요. 4분기에는 지금 수준에서 그렇게 큰 변동은 없을 것으로 생각을 합니다.
Seung Jo Lee: To answer your first question, there really isn't a big reason as to why the corporate tax has gone up. It's just because of the tax rate itself and a big change in the P&L mix. We believe that in Q4, there's not going to be much change either.
Seung Jo Lee: 네, 두 번째 질문에 대해서. 이거에 대해서 지금 해외 자회사 다른 부분에 대해서 검토되거나 그런 부분은 없고요. 지금 이 부분에 대해서 어떻게 생각하는지 개인 기업의 의견을 물어보신다면, 이거는 좀 대답하기 곤란할 것 같습니다.
Seung Jo Lee: Just to clarify, we don't have any other plans to go public of any of our affiliates in the overseas market. If you are asking us about our position and our opinion on the recent policy change, I think it's a bit difficult for us to give an official opinion. Thank you.
Zayong Koo: 네, 감사합니다. 이것으로 2026년 3분기 현대자동차 실적 발표 컨퍼런스 콜을 모두 마치겠습니다. 경청해 주셔서 감사합니다.
Zayong Koo: Thank you. This brings an end to the 2026 Q3 earnings call for Hyundai Motor Company.
Operator: 추후 궁금하신 사항은 현대자동차 IR실로 연락 바랍니다. 경청해 주셔서 대단히 감사합니다. If you have any questions, please contact Hyundai Motor Company's IR group. Thank you very much for your attention.
