Hyundai Motor posts first profit gain this year
By Hyunjoo Jin, ReutersSEOUL--South Korean auto giant Hyundai Motor Co. posted a modest profit gain following three consecutive quarters of decline as strong sales in China and Brazil countered lackluster performances at home and in the United States.
October 25, 2013, 12:27 am TWN
The 3.9 percent year-on-year growth in the quarter ended September puts Hyundai Motor on a recovery track, although rising competition and a firming local currency are obstacles that it would still have to overcome.
Hyundai Motor, once a stellar performer in the global auto industry, has seen its U.S. market share shrink as a weaker yen gives Japanese cars a leg-up. The South Korean firm is also being squeezed by the growing popularity of BMW and Volkswagen models in its home market in the wake of bilateral trade deals.
Hyundai Motor, the world's fifth-biggest carmaker along with affiliate Kia Motors Corp., said on Thursday net profit rose to 2.3 trillion won (US$2.18 billion) in July-September. That was slightly above an average forecast of 2.17 trillion won, according to Thomson Reuters I/B/E/S.
Sales were helped by increased output in Brazil and China after Hyundai Motor set up new factories there. It also benefited from anti-Japan sentiment that broke out last year in China, the world's biggest auto market, after a diplomatic row with Japan over disputed islands.
Analysts expect Hyundai Motor's earnings to rebound in the fourth quarter. Its profit a year earlier was hammered by a costly recall in the United States.
That rebound will set the stage for a moderate recovery next year driven by new models such as Sonata and the Genesis. But Hyundai Motor warned that uncertainties in the global economy could still spoil the show.
“The global vehicle market will grow less than expected in the fourth quarter, because of a delay in the recovery of U.S, and other advanced economies, and concerns about slowing demand in emerging markets,” Hyundai Motor said in a statement.
Hyundai Motor has also been knocked by unfavorable currency movements. The South Korean won has strengthened about 13 percent against the yen so far this year, giving Japanese rivals a bigger competitive edge.