Seoul:<Text>

Hyundai Motor Co., South Korea's top automaker, announced on Thursday that its net profit for the first quarter dropped by 23.6 percent year-on-year. The decline comes amid challenging business conditions influenced by U.S. tariffs and rising raw material costs, exacerbated by geopolitical risks.

According to Yonhap News Agency, Hyundai's net profit for the first three months of the year totaled 2.58 trillion won (US$1.7 billion), a decrease from 3.38 trillion won in the same period last year, as per a regulatory filing by the company. Despite this decline, the net profit figure surpassed market expectations, with analysts estimating an average of 2.43 trillion won, based on a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The automaker reported that operating income for the January-March period fell 30.8 percent year-on-year to 2.51 trillion won, although sales rose by 3.4 percent to 45.93 trillion won. The company attr ibuted the drop in profits to the impact of U.S. auto tariffs, escalating raw material costs, and increased investments. Tariff-related costs were reported as 860 billion won for the quarter. Global wholesale sales also declined by 2.5 percent year-on-year to 976,219 units, reflecting a decrease in overall market demand, although Hyundai noted its performance remained relatively solid compared to other carmakers.

Stronger sales of high-value vehicles, particularly hybrids, along with improved performance in its financial services business, helped mitigate the decline in overall vehicle sales. "Amid growing uncertainties in the global industrial environment, overall demand in the global automotive market has continued to face challenges, with demand declining 7.2 percent from a year earlier," a Hyundai official stated. The company maintained its sales momentum by expanding its range of higher value-added models, such as hybrid vehicles.

Hybrid electric vehicle (HEV) sales re ached a record quarterly high of 173,977 units, while electric vehicle (EV) sales totaled 58,788 units. The share of eco-friendly vehicles in total sales rose to 24.9 percent, with hybrids alone accounting for 17.8 percent, both setting record quarterly levels. Hyundai Motor also noted an increase in its global market share to 4.9 percent from 4.6 percent a year earlier, and its U.S. market share grew to 6 percent from 5.6 percent.

Looking forward, Hyundai anticipates continued challenges in the business environment due to macroeconomic uncertainties, geopolitical risks, and escalating trade tensions. The company plans to drive growth through new model launches, expand its lineup of high-value vehicles, and accelerate electrification efforts while adopting strategies tailored to specific regions.

Hyundai also emphasized its intent to strengthen companywide cost management and contingency planning to mitigate profitability pressures from tariffs and other external factors. In line with its shareholder return policy announced last year, the company will pay a quarterly dividend of 2,500 won per share. "Despite changes in the broader business environment, we will continue to make efforts to faithfully implement our previously announced shareholder return policy to maximize shareholder value," a company official said.