Providing for for toughened European Union environmental rules is expected to dent Hyundai Motor’s profits, analysts have told Reuters.

Reuters said that Hyundai is setting aside cash to comply with an EU regulation that took effect this year, requiring  vehicle makers to cover the cost of stripping toxic parts from old vehicles and recycling most of the waste.

Hyundai Motor did not say how much it was setting aside for the added costs, Reuters reported, adding that local media reports said the company is allowing as much as 180 euros (about $US175) for each of the 1.26 million cars it exported to the EU from 1997 to the first half of this year.

Reuters said that Hyundai Securities has forecast that Hyundai Motor’s Q2 sales would fall to 5.95 trillion won from 6.04 trillion a year ago, while projecting earnings before interest and taxes (EBIT) would fall to 298 billion won from 596 billion a year ago.

The brokerage sees Hyundai Motor’s pre-tax profits (EBT) falling to 336.9 billion won from last year’s 470 billion won, Reuters said.

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