Hyundai Motor’s second-quarter net profit stayed near a record high achieved a year earlier, beating market forecasts, as strong China growth overpowered rising competition and tight supply that eroded sales at home and in the United States.
The automaker reported a KRW2.52 trillion won (US$2.26bn) net profit for April to June, compared with a consensus forecast of KRW2.39 trillion from a Reuters’ poll of analysts.
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This compared with KRW2.55 trillion in net profit a year earlier, and KRW2.09 trillion the preceding quarter.
The South Korean automaker posted an operating profit of KRW2.41 trillion on sales of KRW23.18 trillion in the second quarter.
Sales in China jumped 36% in the first half from a year earlier, even as the world’s second biggest economy has slowed in nine of the past 10 quarters, Reuters noted.
Hyundai said its South Korean sales fell 0.7% in the first half from a year earlier, while its US sales inched up 1.2%.
Its South Korean labour union refused to work during weekends over wages from 9 March to 1 June, hurting both domestic shipments and exports to the United States and other markets from its biggest manufacturing base.
Eyes are on whether the union will stage summer strikes for a second consecutive year over annual wage talks after its worst walkout last year in terms of production loss.
The South Korea won appreciated 2.6% against the dollar on average in the second quarter from a year earlier, reducing the value of its repatriated foreign earnings.
In those crucial markets, Hyundai struggled to defend market share amid intensifying competition and the ageing of its models such as Sonata and Elantra. Hyundai cut vehicle prices or gave more incentives from a year ago to lure customers from rivals and to ignite demand for its ageing models, analysts told Reuters.
Hyundai, once a stellar performer in the US market, has been losing market share this year, partly because its factories have been unable to keep up with demand in the recovering market which posted its strongest month since 2007 in June.
In Europe, Hyundai’s sales declined 9%, with the region’s car sales slumping to their lowest levels in 20 years in the first half of this year because of dismal economic conditions.
