Hyundai Motor has posted a first quarter net profit down 43% to KRW225bn ($US167m) on sales down 23% to KRW6 trillion.
Go deeper with GlobalData
Global market share roses to 4.7% from 4.0% a year ago on higher sales in emerging markets, the automaker said in a statement.
It sold 621,718 units (domestic & exports: 316,366 units, overseas plants: 305,352 units) worldwide in the first quarter, a 13.3% decline from a year earlier as global demand fell.
Operating profit declined 71% to KRW153.8bn as the company spent more on marketing to raise brand awareness and enhance dealers.
Hyundai said it would continue to improve profitability of its small- and medium-sized cars, while introducing new, higher-end models and would also maximise the benefits of the favourable exchange rate and increase market share.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataIt said demand in advanced markets was falling at a two-digit pace and even demand in emerging markets was dampening.
“Hyundai Motor plans to overcome the current challenges in the market by increasing its brand awareness and executing regional marketing strategies, as well as supplying the right models at the right time,” it said.
It said the new ‘Hyundai Assurance Program’ in the US, which provides free unemployment insurance for finance contracts, had helped spur sales in depressed market conditions.
The programme has since been copied by other automakers both in the US and elsewhere.
Hyundai posted a net profit of KRW1.44 trillion, down 14% year on year for calendar year 2008. Full-year sales rose 5.1% to KRW32 trillion.
Hyundai officials said production and earnings would slowly gain pace from the second quarter of this year.
“Given the severity of the economic slowdown, Hyundai performed relatively well but that’s largely thanks to the windfall gains from a weak won,” HMC Investment Securities research head Lee Jong-woo told Reuters.
“From the second quarter, we expect global governments’ economic stimulus measures and support plans for the auto industry to have some positive effect,” chief financial officer Chung Tae-hwan told the news agency at a results presentation.
South Korea will cut taxes by 70% to customers who replace old cars with new from next month. Hyundai this week raised its 2009 sales growth target for China 11% after tax cuts for small cars and economic stimulus packages there boosted sales.
“From the second quarter, we expect economic stimulus measures and support plans in some nations for the auto industry to have some positive effect on the sector,” Chung added.
He added that Hyundai has targeted a US market share of over 5% compared to an accumulated 4.3% in the first quarter.
Chung had earlier denied that Hyundai was interested in a stake in General Motors if it went bankrupt and was put up for sale.
“We don’t have such a plan even though the US market is very important to Hyundai Motor,” he told Dow Jones Newswires.
Hyundai and affiliate Kia operate two auto assembly plants in the southern US.
