Hyundai Motor sees no immediate threat from the weakening Japanese yen but promised toughen its readiness against its Japanese and global rivals as they are expected to ramp up their offensive amid an overall slowdown in car sales this year.
“Because we have continued expanding overseas production, the risk from volatile foreign exchange rates has been largely reduced,” said Lee Won-hee, executive vice president and chief financial officer, during an earnings conference call at the company’s headquarters in southern Seoul.
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According to the Korea Herald, the Hyundai CFO said the business impact from the weakening Japanese yen, in particular, would be limited as Japanese carmakers have also moved their factories abroad for the same reason.
“We still expect fiercer competition with Japanese rivals in some markets such as Australia and Russia. We also plan to step up our preparedness against their enhanced offensive on our home turf (Korea),” he said.
Hyundai’s annual profit increased 5.1% year on year in 2012 to KRW8.43 trillion (US$7.88bn) on strong sales in overseas markets, especially those of pricier models with higher margins.
The automake sold 4.41m cars – 667,496 in Korea and 3.74m globally – and booked KRW84.4 trillion in sales.
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By GlobalDataIncluding affiliate Kia Motors, the Hyundai Motor Group was the fifth-largest carmaker last year, behind Toyota, General Motors, Volkswagen and the Renault-Nissan alliance.
Despite profit records for four consecutive years, HMG’s pace of growth slowed last year as some negative factors, including volatile foreign exchange rates, affected its car sales in the fourth quarter, the company said.
The carmaker predicted that the global automotive industry would face sluggish car sales in both advanced and emerging markets, expecting a moderate 3% growth in demand for new cars.
The company also said global competition would get fiercer this year as each government may come up with new measures to protect their domestic carmakers.
In Korea import brands have been gaining ground rapidly in recent years and biting into Hyundai and Kia’s market dominance of 80% of Korean car sales.
“We failed to give a prompt response to the popularity of compact vehicles with an engine capacity of less than 2,000 cc, especially diesel models. We will diversify lineups to strengthen competitiveness in the domestic market,” Lee said, according to the newspaper report.
Hyundai said the company aims to sell 4.66m vehicles globally in 2013 with its management emphasis being freshly put on product and service quality and upgrading its brand image.
