Hyundai Q1 net plunges 21 pct on weak China sales

SEOUL-- Hyundai Motor Co., South Korea's biggest carmaker by sales, on Wednesday posted a 21 percent drop in first-quarter net profit due to weak sales in China and emerging markets.

As slowing global growth and U.S. President Donald Trump's protectionism are set to fuel uncertainties in the automobile industry, Hyundai Motor will focus on launching new models and sport-utility vehicles in the U.S. and other major markets to support its bottom line for the rest of the year, the company said in a statement.

It plans to launch a series of new vehicles such as the small Kona SUV and the G70 luxury sedan this year to boost sales. Details about the launches of the two new vehicles have yet to be announced by the company.

For the three months that ended March 31, Hyundai's net profit plunged to 1.41 trillion won (US$1.3 billion) from 1.77 trillion won a year earlier, the statement said.

"Sharp sales declines in China and some Asian and Middle Eastern markets had an impact on the quarterly results despite rises in such places as Russia and Brazil," it said.

In the January-March period, Hyundai sold a total of 1.09 million vehicles, down from 1.11 million units sold a year-ago, the statement said.

In particular, its sales in China declined to 196,000 units in March, down 14 percent from a year earlier and down 46 percent from the last three months of 2016 due to a row between the two countries over the deployment of the Terminal High Altitude Area Defense (THAAD) system.

As Seoul and Washington on Wednesday began installing the radar and other core parts of the THAAD system in Seongju, 296 kilometers south of Seoul, sales in China are not likely to rebound from recent falls for the time being, analysts said.

Operating profit also fell to 1.25 trillion won in the first three months, down 6.8 percent from 1.34 trillion won a year earlier. Sales rose 4.5 percent to 23.36 trillion won from 22.35 trillion won during the same period.

The decline in operating income was also due to one-off costs worth 200 billion won involving the latest recalls of some vehicles, Hyundai Executive Vice President Choi Byung-chul told analysts during a conference call on the quarterly results.

In extended efforts to bolster sales, Hyundai will further promote the Creta subcompact front-wheel-drive crossover in Russia, Brazil and India. Last month, it sold more than 20,000 Cretas from plants in the three countries.

"While expanding sales of SUVs, the company plans to launch the latest Sonata sedan in global markets in the first half," Hyundai's Vice President Koo Za-yong said in the conference call.

Hyundai and Kia Motors Corp, which together form the world's fifth-biggest carmaker by sales, aim to sell 8.25 million vehicles globally this year, up 4.4 percent from 7.9 million units last year.

Source: Yonhap News Agency

You may also like...