Ladies and gentlemen, thank you for attending this conference call. We will now begin Hyundai Motor Company's business results conference call for the second quarter of 2026. Once again, the presentation materials can be downloaded from the Financial Supervisory Service's 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 and Head of Financing and Accounting Subdivision, Michael Yun, the Head of IR Group, and Vice President Hyung-Seok Lee from Hyundai Capital.
We will first have Hyundai Motor Company's presentation on their business results, followed by a Q&A session with the attending investors. Those who have questions are advised to press the star button, followed by one after the presentation. Now, we will proceed with the presentation by Michael Yun, the Head of IR Group at Hyundai Motor Company.
Hello, this is Michael Yun, Head of IR Group. Welcome, everyone, to Hyundai Motor Company's 2026 Q2 business results conference call. On behalf of Hyundai Motor Company, I appreciate your time for participating in today's call. Please refer to the presentation, HMC 2026 Q2 Business Results, on our IR 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 is Q2 highlights. Despite stagnant industry demand in the U.S., one of our key markets, our market share in the U.S. rose by 0.2 percentage points year-over-year to 6.3%, maintaining market share in the 6% range for the five consecutive quarters.
In response to strong hybrid demand, the global hybrid sales reached a record quarterly high of 188,000 units, and the share of global hybrid sales recorded an all-time high of 18.9%. In the U.S. market, the share of hybrid sales reported 26.2%, continuing its growth momentum. Finally, despite unfavorable conditions with demand slowdown, market share growth in major markets and robust hybrid sales led to the highest second quarter revenue on record. Next is the sales performance. In the second quarter of 2026, global wholesale sales totaled 992,000 units, down 6.9% year-over-year, primarily due to a decline in global industry demand and parts supply issues. Retail sales totaled 999,000 units, representing a 4.2% decrease from the previous year. Next, I will go over details about our wholesale by key markets.
In the U.S. market, sales increased 0.9% year-over-year, totaling 265,000 units, while industry demand remained largely flat, with a 0.5% increase from the previous year. Demand for electrified vehicles, afforded by factors such as elevated fuel prices, continued to drive sales. Electrified vehicle sales increased 2.5% year-over-year, reaching 81,000 units. Hybrid sales accounted for a record high 26.2% of total sales. Amid weaker consumer sentiment caused by uncertainty surrounding interest rate cuts and persistently high inflation, demand concentrated on practical vehicle segments such as mid-size sedans, resulting in sedan sales increasing 9.6% YoY. In Europe, sales decreased by 10.9% YoY, totaling 144,000 units. Optimization of product depth mix drove SUV sales to rise 0.4% YoY, and hybrid sales increased by 17.8%. Despite challenging sales environment, mix improvement was achieved by focusing on high-margin vehicles.
Strong hybrid sales continued in Europe as well, driving electrified vehicle sales up 3.7% YoY to 75,000 units. We respond to growing demand for electrified vehicles. We plan to strengthen our EV lineup and further expand sales momentum in the market through the launch of the all-new IONIQ 3 in the second half of the year. In the domestic market, sales decreased by 16.4% YoY to 158,000 units due to production disruptions caused by a fire at a major parts supplier . However, EV sales rose 30.8% YoY, driven by government incentives for eco-friendly vehicles and IONIQ lineup. However, due in part to hybrid supply constraints, total electrified vehicle sales declined 7% YoY to 64,000 units.
In the second half of the year, with the rollout of key new models including the Grandeur Hybrid, Avante Hybrid, Tucson Hybrid, and Genesis Hybrid models, we plan to restore sales momentum and further expand electrified vehicle sales. Next, I will explain the sales analysis by vehicle types. Overall SUV sales, including Genesis, totaled 611,000 units, accounting for 61.6% of total sales. While EV sales declined 12.7% YoY, hybrid vehicles sales increased 11.3%, continuing their strong growth trajectory and driving overall sales performance. As a result, total electrified vehicle sales rose 1.7% from the previous year to 266,000 units.
This concludes the discussion on sales, and I will now provide an explanation regarding profits and losses. First is income statement. Consolidated revenue increased by 1.9% YoY to KRW 49.2 trillion, and operating income decreased by 20.8% YoY to KRW 2.9 trillion. In the automotive division, revenue decreased by 2.1% YoY due to lower sales caused by the global demand slowdown and disruptions in parts supply. Operating profit decreased by 11.5% YoY due to higher incentives and unfavorable mix resulting from production disruptions of high margin models.
Revenue from the finance division increased by 15.7% YoY, and operating profit increased by 16.2%, driven by a continued high penetration rate and growth in managed assets in the U.S. market. Net income decreased by 11.1% YoY to KRW 2.9 trillion as a result of operating profit decline. Next is quarterly revenue and operating income analysis. Revenue benefited from favorable exchange rates, contributing KRW 2.7 trillion, while decreased global wholesales resulted in a negative volume effect of KRW 2.25 trillion. Additionally, rising incentives resulted in a negative mix effect of KRW 1.01 trillion. Combined with growth in the financial segment, total revenue rose 1.9% YoY.
Despite the record high second quarter revenue, positive foreign exchange impact was reduced to KRW 238 billion due to higher quarter end exchange rates relative to the quarterly average exchange rate. In addition, sales decreased in Middle East region and sales disruptions caused by parts supply issues resulted in a negative volume effect of KRW 542 billion. Regarding the mix effect, despite favorable contributions from increased sales of high margin models, including hybrids, a negative impact of KRW 569.9 billion was recorded due to higher incentive spending, resulting from intensified competition in major markets. As unfavorable business conditions and intensified market competition negatively impacted our profitability, operating profit decreased by 20.8% YoY to KRW 2.8 trillion, resulting in an operating profit margin of 5.8%. The last part is SG&A and net profit.
Our Q2 cost of good sold ratio recorded 82.2%, an increase of 3.3 percentage YoY due to the rise in material costs. SG&A recorded KRW 5.9 trillion, a 6.8% increase compared to last year due to higher sales warranty provisions, resulting from the increase in quarter-end exchange rates. Finally, our net profit decreased by 11.1% to KRW 2.9 trillion as a result of operating profit decline. This concludes the end of the presentation of the 2026 Q2 business result. Thank you for listening. Next, Executive Vice President Seung Jo Lee, the Head of Planning and Finance Division, will assess the company's business results in Q2.
Good afternoon. This is Seung Jo Lee, Executive Vice President and Head of Finance Division. I will now present Hyundai Motor Company's 2026 quarter business performance, as well as details regarding the Q2 dividend. In the second quarter, unfavorable business conditions persisted due to geopolitical issues, U.S. tariffs, and inflation. Production disruptions caused by component supply issues from both domestic and overseas suppliers, combined with decreased sales in the Middle East region, resulted in global wholesale volume declining 6.9% YoY to approximately 992,000 units.
Despite the challenges, we achieved continued top-line growth driven by robust sales in the North American market and record high hybrid vehicle sales. Additionally, favorable FX effects from the continued weakness of the Korean won contributed to a record high quarter revenue of KRW 49.2 trillion, representing 1.9% growth YoY. Next is our operating profit. Production disruptions occurred primarily in Genesis due to component supply issues from suppliers. This not only resulted in lower sales volumes, also negatively impacted the product mix.
Combined with increased incentive spending to respond to intensified competition in major markets and clear inventory of aging models ahead of new model launches, operating profit reached approximately KRW 2.85 trillion. The operating profit margin declined 1.7 percentage point YoY to 5.8%. Our domestic plant, which is the largest facility among all global plants, experienced a supply interruption of engine valves due to a fire at our component supplier. This resulted in production delays affecting Hyundai's major volume models and Genesis vehicles. To minimize production losses, we made efforts to shift production to alternative vehicle models. By May, we successfully completed the development and application of substitute engine valves across all products. Since most of the affected vehicle models were high margin vehicles, the product mix deteriorated in the second quarter, which had a negative impact on operating profit.
Additionally, a fire at Hyundai Mobis India plant caused temporary production disruptions at our HMI plant. To minimize the impact of these domestic and international production disruptions, we maximized the use of existing inventory in the second quarter, we expect to recover these losses in the second half through expanded production. Due to the Middle East conflict and inflationary pressures, prices of key raw materials such as plastics have risen sharply. In the second quarter, raw material costs increased by around KRW 400 billion. To offset this impact, we have implemented company-wide material cost reduction initiatives, successfully offsetting approximately 50% of the negative impact from raw material price increases. We continue to pursue these cost reduction efforts.
As major raw material prices have begun to trend downward in the second half of the year, we anticipate that the negative impact on product profitability from rising raw material costs will be further reduced in the second half. I'll explain the major factors affecting our financial results, including incentives and currency exchange effects. First, we expanded incentives in response to the abolition of the U.S. IRA and aggressive market entry and sales expansion of Chinese electric vehicles in Europe. Additionally, ahead of new model launches in the second half, we executed incentives to clear inventory of Asian models, which resulted in expanded incentive spending in the second quarter. As major new models launch in the second half, we are targeting a normalization of incentive spending in the second half.
Regarding currency exchange rates, as the Korean won continued to weaken, the average exchange rate increased compared to the same period last year, resulting in a favorable currency exchange effect. However, the quarter-end exchange rate also increased, which created a negative currency change effect on credit provisions, offsetting a significant portion of the positive effects. In this manner, HMC has endured an increasingly challenging business environment, including unfavorable operating conditions across the entire automotive industry and temporary component supply disruptions. Based on our diversified powertrain and regional portfolios, we have demonstrated rapid and flexible responsiveness to changes in internal and external business environments to minimize negative impacts. As a result, alongside revenue growth, our profitability has continued to improve following the turnaround that began in the first quarter, and we have recorded relatively favorable performance in the second quarter.
We aim to continue improving our performance in the second half and demonstrate our market competitiveness. The component supply issues mentioned earlier have normalized at this point, and we plan to recover the production losses from the first half. We expanded production in the second half. Additionally, In the second half, we have scheduled the launch of the Hyundai Grandeur facelift hybrid sales and the Avante full model change, as well as new Genesis models. Through these new model launches and sales, we expect profitability recovery to accelerate in the second half of the year. To this end, we are maintaining our annual operating profit margin guidance of 6.3%-7.3% without downward revision from our initial guidance at the beginning of the year. Next, I'll explain the second quarter dividends.
Based on the value-up program announced in August 2024, we plan to implement a quarterly dividend of KRW 2,500 per share for both common and preferred shares in the second quarter. The record date for the second quarter dividend is August 31st, and the payment date is September 30th. Geopolitical issues, intensifying competition, and trade policies continue to create a challenging business environment, and global automotive companies are facing unprecedented difficulties.
Our company will pursue recovery of first half production losses to expand this production alongside the full-scale launch of new models in the second half, and through company-wide efforts, including active implementation of contingency plans. We will achieve the annual guidance presented at the beginning of the year and strive to demonstrate our fundamentals in the global market. Thank you for your attention. Next, Vice President Hyung-Seok Lee, the Head of Planning and Finance Division of Hyundai Capital, will assess the Q2 results for the finance business.
Good afternoon. I am Hyung-Seok Lee, Head of Finance at Hyundai Capital. I'll present finance business's second quarter 2026 results and outlook for the second half. Despite continued external uncertainties in the second quarter, including prolonged geopolitical risks stemming from the Iran conflict and increased exchange rate volatility in both domestic and global markets, Hyundai Capital and Hyundai Capital America maintained stable performance. This was supported by close collaboration with the group and a strong captive asset portfolio. Let me now walk you through the results of each company, starting with Hyundai Capital. Leveraging strong credit profit and funding competitiveness, we continue to support the group's vehicle sales through financing programs.
As a result, the share of the automotive finance maintained 81% of total earnings assets in the second quarter. Despite intensified market competition, earnings assets grew 3.8% YoY, driven by the expansion of dedicated EV financial products and joint sales promotions with the OEMs. Despite external uncertainties, interest income increased on the back of the solid asset growth. However, lower gains from the sale of non-performing loans resulted in operating revenue remaining largely flat year-over-year.
On the expense side, interest costs increased due to higher borrowings supporting asset growth. Nevertheless, we minimized funding cost pressures by diversifying our funding mix through new funding instruments and foreign currency borrowings, despite the higher interest rate environment. Also, while delinquency rates have been rising across the financial industry, our delinquency ratio improved by 11 basis points YoY to 0.78% as of the end of June.
Although lower credit costs reflected improved asset quality, total operating expenses increased 3% YoY, mainly due to higher SG&A expenses, including payroll costs and additional provisions related to lease assets. As a result, operating profit declined 23% YoY. However, driven by improved performance at overseas affiliates such as the U.K., France, and Germany, equity earnings increased 26% YoY. Consequently, our net income increased 2.3% YoY. Looking ahead to the second half, along with prolonged geopolitical uncertainties, increased volatility in funding markets following the Bank of Korea's recent base rate hike on July 16th will create challenges for us. To navigate this environment, we will further strengthen funding stability to optimize financing strategies tailored to market conditions, including favorable foreign currency borrowings and funding opportunities linked to investment demand from tech companies.
At the same time, we will continue to focus on high-quality assets and rigorous credit risk management to minimize risk. We also plan to successfully complete the launch of our India finance subsidiary, which is currently in the final stages of preparation, and further expand our operations in Australia and Indonesia. We will continue to strengthen our role as the group's global mobility finance partner and reinforce our captive finance franchise. Next is Hyundai Capital America, or HCA. Supported by strong vehicle sales from the group, driven by robust demand for hybrid vehicles in the U.S. market, HCA maintained a high penetration rate, resulting in 11% YoY growth in total earnings sales. Operating revenue increased 21% YoY, driven by continued asset growth and higher finance and lease income.
Operating expenses increased 22% YoY, reflecting higher lease depreciation expenses, as well as increased interest expense associated with larger funding requirements to support asset growth. While delinquency rates were higher than a year ago due to ongoing macroeconomic uncertainty, quarterly delinquency trends continued to improve following the first quarter. Also, we continue to maintain a high-quality portfolio, with prime customers representing 88% of total assets.
Based on this, HCA's operating profit increased 9.7% YoY, while net income increased 9.76%, delivering solid financial performance. In the second half, market volatility in the U.S. will increase, driven by persistent inflationary pressures and geopolitical conflicts. Nevertheless, leveraging its strong credit ratings and funding competitiveness, the company has secured ample liquidity and is well-prepared for potential market disruptions. In the second half, we will continue to work closely with the group to support vehicle sales financing, respond flexibly to changing market conditions. This concludes the presentation on the financial business. Thank you for your attention. With that, we'll conclude the presentation and take your questions.
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Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone.
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The first question will be provided by Jiwoong Yoo from Daol Investment and Securities. Please go ahead with your question.
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This is Jiwoong Yoo from Daol Securities. I'd like to thank you for giving me this chance to ask questions. I'd like to appreciate your previous explanation regarding financial results of the second quarter. I do have the two questions. If I explain my first question first, you've mentioned that you're going to maintain the guidance for the OPM for the year 2026. I'm wondering, you're also maintaining the annual guidance for the annual sales figure as well. If you look at the results of the second quarter, there were some production disruptions that were happening around Genesis model as well. If you look at the results by region, the second quarter's result in the European region was quite sluggish.
I think that you're going to make more efforts to make up for this in the third quarter, fourth quarter, and I'm wondering if these efforts are going to raise the sales figures in these areas and the Genesis as well. If you think it will be safe to say that you can deal with the situation in the third quarter, fourth quarter. My second question is related to European region. I believe that the industry demand in the European region is rising, so the size of the European market is higher and larger than that of the U.S. If you look at our situation and result in the first quarter and second quarter, there was a negative growth in the first quarter, and the result was quite sluggish in the second quarter. That's something I feel quite regrettable.
If I may say this, I think that if you launch new models like IONIQ 3 and Tucson, you mentioned that you are going to make profit in the second half, I'm wondering if you think this is still valid statement or not. I think the Tucson will be more important because this is a volume model, so if you think the production capacity will increase compared to NX4. I'm thinking that mix in this situation is mainly happening in Europe, and of course, this can be applied to other regions as well. I think the European region is still suffering. Do you think there will be a different view toward the second half for this region with new launches that you've explained?
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Let me answer your first question first. You asked about if we are going to maintain our sales guidance for the annual basis while we maintain our OPM guidance. We think that the production disruption caused by several issues was quite significant in the first half, we made our efforts to deal with the situation by liquidating the inventory that we had. We're still making efforts, but our efforts that we've done so far during the first half of this year was not actually enough to cover up.
We are currently implementing our counter measures by utilizing our domestic production line as well as our overseas production lines in India as well. We are going to make more efforts to meet our annual guidance. If you look at our external focus and others, still there are things that we need to make up for it. If you look at our history last year in 2024 as well, sometimes we couldn't meet the guidance for the sales figure, we were sure to maintain and achieve the OPM guidance. It is true that we overachieve our top-line revenue guidance by producing more high value added and hybrid vehicles.
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If I add a little bit more, I'm not saying that we're going to change our annual guidance for the sales figure. We are going to do our utmost efforts to achieve the sales guidance and others that we communicated with the market, and we are preparing for the initiative and countermeasures for that. We will continue to monitor the market situation. Since we are going to hold the CID at the end of August, we are going to share more details and accurate numbers when we have that event.
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Your second question was around your concerns about our performance in the European market. You asked about the forecast for the second half of this year. We are operating ICE volume models like Kona and Tucson, and they are aging. Because of that, we had a difficult time in the first half. We are facing very aggressive entry by the Chinese players with their EV lineups, and that has contributed to enhancing the overall industry demand in Europe.
On the other hand, we had to operate a limited number of lineups like IONIQ 5 and Kona in Europe, whereas we didn't have appropriate model for the B segment, which can be against the Chinese players. Like you have mentioned, we are making preparation for new model launches, including IONIQ 3 and Kona. We are going to make sure that those models will be equipped with competitive price so that we can be producing and introducing competitive models for the consumers. That will be achieved by taking the balance between profitability and cost.
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With respect to new model launches, what we are preparing for in the second half of this year will include IONIQ 3 and BC4 CUV. The timeline is concentrating the latter half of this year toward the year-end. It will have limited impact to increasing our yearly based sales figure. For IONIQ 3, we are expecting around 20,000 units in the latter half of this year. This is our sales target, and the Tucson will be launched in the fourth quarter of this year.
There will be some limited impact to increase in our overall annual sales figure, and that revenue generation will be created in earnings from next year. It is true that it will be difficult to achieve 100% of what we are committed to. With the new model launches scheduled for the fourth quarter, starting from the next year, we will be able to sell those vehicles on a full year basis, and we can expect a growth in the European market.
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Also the proportion of HEV is increasing in Europe as well, and it is having a positive contributing impact to our profitability level.
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The following question will be presented by Yoonchul Shin from Kiwoom Securities. Please go ahead with your question.
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Hello, I am Yoonchul Shin from Kiwoom. Thank you for the opportunity. I have two questions. First is regarding the Boston Dynamics. According to the media outlets, they say that Hyundai Motor is making the final preparations for the BD put option exercise. However, there was no official statement or the media outlets from Hyundai Motor Company. I would like to know what the official statement, official announcement regarding the SoftBank remaining option and I would also like to hear about the background of such decision making. My second question is regarding the IONIQ 3 in Europe.
You mentioned that the IONIQ 3 will be launched in Europe in the second half of this year. According to the first quarter earnings call of Kia, the new car will be launched, and when the new car is launched, there is a policy regarding the provisions in the initial stage regarding ICE vehicles. I wonder whether you will apply the same policy to IONIQ 3 that will be launched in Europe because it's a 20,000 unit volume model. I would like to know the initial policies regarding the IONIQ 3 launch in Europe.
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Hello, I'm Zayong Koo from IR office. To answer your question about the SoftBank put option exercise, yes, SoftBank did exercise the put option in early July of this year. Because each shareholding company is making decisions in very discreet manner and in a very careful manner, I cannot give you more details at the current stage, please understand that.
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Yes, I'm Seung Jo Lee. Let me answer your second question. You asked that the provisions that will be applied to the new IONIQ 3 and whether that will have a burden on the future profitability. Yes, it is true that the provision amount of EV3 will be higher than the ICE model in amount. This is because the PE parts, such as electrification parts and battery parts, their unit cost is higher than the ICE models. Even with the similar level of sales guarantee and provision, the amount is bound to be higher than that of EV. That is why the profitability of EV is lower than the profitability of ICE models.
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Additionally, we are making a multifaceted effort to reduce quality costs in terms of PE component. As you know, we are reworking battery, we are doing the partial repair of battery, also we are developing flow system and reducing the labor cost in upgrading the system OTA. Like this, we are making various efforts to reduce quality costs.
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The last question will be presented by Sung-Rae Kim from Hanwha Investment & Securities. Please go ahead with your question.
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Thank you for the opportunity to ask question. This is Kim- Sung Rae from Hanwha Securities. I have three questions. My first two questions are related to cost. My first question is centering around the deteriorating mix impact and you gave us the explanation by providing the breakdown between incentive and mix. I'd like to hear more from you if we can understand more details about this.
Also, of course, the tariff issue has been already set and there can be ongoing issues with respect to tariff still. If you can remind me once again or give me an update regarding the tariff impact in the second quarter, that will be also appreciated. My third question is related to share buyback. If I look at your company's direction for shareholder return policy, you intend to close the gap between preferred stock and common stock.
If we look at the cumulative number of share buyback so far in the first half of this year, it can be understood that the controlling shareholders net income will be around KRW 6.1 trillion . Of course, on an annual basis, it can go up a little bit more, but it is safe to say that your purchasing amount so far is quite tight considering how much treasury shares you've bought so far for the proposed shareholder policy. I'm wondering if you are going to maintain the previous direction to set the target of around KRW 4 trillion for this proposed. With respect to the direction that you need to give more priority for the preferred stocks for their shareholders. I'm wondering if this direction is still valid or not.
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Let me answer your first question. You asked about the breakdown of the financial figures that we've explained. The mix deterioration can amount to KRW 0.6 trillion . Out of KRW 0.6 trillion, KRW, 0.2 trillion stemmed from the powertrain deterioration, including production disruption, including Palisade and Genesis. If you understand the absolute impact or absolute number of the net incentive including the price hike, it can be translated into KRW 0.4 trillion .
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If I add a little bit more, there can be other factors with respect to the deterioration of mix. I can say that the proportion of the HEV is increasing, our sales figure for the HEV actually went up on a YoY basis. That made a positive contribution to the mix as well. The amount can be translated in KRW 2.4 trillion. Overall, there can be multiple factors, but there were some negative factors because of the powertrain deterioration.
I can say once again, the contributing factor from the HEV can be translated into KRW 0.4 trillion, which is very positive for our side. Since we expect that the proportion of HEV is going to go up, this will have a positive impact in the latter half this year, since we are going to not have any impact from the production disruption that we had in the past.
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Your second question was about tariff. The tariff payout amount in the first quarter was KRW 0.9 trillion, and the payout for the second quarter was flattish on a QoQ basis at the amount of KRW 0.9 trillion. For your reference, the payout for the third quarter was KRW 1.8 trillion, and for the fourth quarter, it was KRW 1.4 trillion. If we compare the numbers on a YoY basis in the latter half of this year, the tariff impact will decline.
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Let me answer your third question. I believe that there were two parts of your question. First part of your question was related to our plan to share repurchase, and second part of your question was related to close the gap between preferred stock and common stock. When we repurchased the treasury stock in the first quarter, we gave a high proportion to the purchase amount of preferred stock, but the amount was not really big. That's the reason why it was not really well represented.
When we calculated the number, we set the proportion of the preferred stock to be 25% higher than the portion for the common stock. Maybe this can answer your question with respect to the direction of the shareholder return policy that we've communicated to the market. Regarding overall shareholder policy, it is quite very difficult for us to disclose specific matters since it will be related to disclosure issues and legal concerns. Please understand this. When we have the CID this August, we are going to make sure we can give you more accurate numbers and more details with respect to the shareholder return policy.
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If I elaborate a little bit more about our OPM record, it was 5.5% in the first quarter of last year and 5.8% in the second quarter of last year. We made a turnaround in the first quarter of this year. We are going to have a solid OPM in the second quarter, showing a growing trend. To meet the annual guidance, of course, we need to make more efforts in the third quarter and fourth quarter, and there should be continuous growth in these quarters. If we compare what we are expecting for this year on a YoY basis, we can fully say that there will be growth, and this is applied to the fourth quarter as well. Please understand that all the OEMs are going through a very tough time and challenging market environment.
On the other hand, relatively speaking, we were able to post quite solid performance. Of course, the first quarter results and guidance, I talked about these numbers, and of course, the second quarter's financial results are not fixed in stone. I'd like to mention once again, our performance that we recorded was quite solid, and this is not lagging behind other competitors. We will continue to implement the measures that we've taken so far in the second half as well, and we are going to make sure that we can achieve a top-tier OPM in this auto industry.
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This is the end of the second quarter 2026 earnings conference call of HMC. Thank you for your time.