Hyundai Motor Group says it has now passed Volkswagen Group to become the second-most profitable automaker in the world, a milestone confirmed by CEO José Muñoz during a recent media briefing in France. Muñoz claimed Hyundai has been the world’s No. 3 automaker by volume for several years, but has now climbed to No. 2 globally in operating profit, trailing only Toyota.
“We have become, already, several years in a row, the number three global OEM [by sales]. And in fact, when you consider profits, we are number two,” Mr Muñoz said to media including Australia's Car Expert. “So we just overtook Volkswagen very recently.”
The shift comes as Hyundai expands its EV and hybrid lineup, boosts margins through platform efficiency, and strengthens demand across core models, including new lease deals. Meanwhile, Volkswagen continues to battle cost-cutting pressures, software delays, and factory modernization challenges that have eroded profits in key regions.
Hyundai’s Profit Jump Explained
According to Muñoz, Hyundai’s surge is the result of what he calls the “Power of the Group,” a vertically integrated strategy that keeps more development, battery production, and component manufacturing in-house. That approach has helped Hyundai offset challenges that have hampered rivals, including rising material costs and EV-market unevenness.
Industry data backs up Muñoz’s claim with Hyundai reportedly logging around 6.5 trillion won (about $4.8 billion) in operating profit last November, outpacing Volkswagen’s estimated 4.3 trillion won. Strong global demand for Hyundai’s electric models, including larger three-row EVs that compete directly with new entries, has helped maintain momentum even as EV markets fluctuate.
Hyundai Motor Group’s broader footprint, spanning Genesis, Kia, robotics divisions, and urban air mobility projects, also contributes to stability in a volatile global market.
What’s Driving Volkswagen’s Decline
Volkswagen remains a massive automaker by volume but has been navigating a turbulent restructuring phase. Software development issues, slow EV-production scale-up, and high domestic operating costs have forced the company into aggressive cost-cutting mode. Several plants in Germany face potential downsizing or repurposing.
The company has also been dealing with reputational pressure, including supply-chain scrutiny after Hyundai drew wider attention to labor-monitoring practices across the industry. Although the lawsuit is not directly tied to Volkswagen, it highlights the increased compliance expectations all global automakers are now facing.
Why It Matters
If Hyundai’s claim holds through annual reporting, it marks a significant realignment of the global automotive hierarchy. Profitability, and not volume increasingly determines which automakers can afford rapid EV development, battery-plant investment, and long-term platform strategy.
Hyundai’s rise suggests the company is better positioned for the next phase of electrification than many rivals expected. Volkswagen now faces a widening gap that could impact product cadence, EV rollout timing, and competitiveness in North America and Europe.
For consumers, the shift shows how brands like Hyundai, have become central forces in the modern EV era, capable of out-earning giants while expanding their footprint across mainstream and premium segments.
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