Hyundai Motor has reported an 80% jump in quarterly profit due to record US sales of its new Sonata sedan and Santa Fe sport utility vehicle.
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But Reuters noted that sluggish home market sales, hit by tighter lending rules and a mountain of unpaid credit card bills, have cast a shadow over the near-term outlook for sales.
“I don’t see any strong momentum building up for Hyundai at the moment, with the domestic economy remaining weak and the Korean won spiking up to hurt exports,” Mun Jang-ju, a fund manager at Tong Yang Investment Trust & Management, told the news agency.
Mun reportedly said it would be difficult to expect new earnings growth in the immediate future for Hyundai since the car maker plans to roll out new models after April.
Helped by a weaker local currency that made Korean products cheaper in overseas markets, carmakers played a key role in pulling the South Korean economy out of a prolonged slump by increasing shipments last year but the won has crept up since late 2003 to four-month highs against the dollar, Reuters noted.
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By GlobalData“Troubles in the credit card sector, a surge in oil prices, unstable exchange rates and economic uncertainties remain this year,” Hyundai’s president, Park Hwang-ho, reportedly told analysts.
Exports, which make up 60% of Hyundai’s earnings, rose 11% to 424,413 units in the fourth quarter from a year earlier, while local sales fell 15% to 149,634 units.
Hyundai, 10-percent owned by DaimlerChrysler, posted a net profit of 460 billion won ($US396.5 million) for the quarter, compared with 253.9 billion a year earlier, according to Reuters calculations based on annual profit data. Sales rose 7% to 7.3 trillion won from 6.8 trillion.
The profit was broadly in line with a consensus forecast of 469.6 billion won in a Reuters survey of five analysts and the earnings growth topped a 60% rise in quarterly profit for Toyota Motor.
Solid foreign demand in 2004 should put Hyundai Motor on track to achieve record sales of 2.145 million vehicles, analysts told the news agency, which noted that the firm, which controls nearly half of the South Korean car market, has seen three consecutive years of record sales.
Hyundai said the North American markets accounted for 51% of total exports while Europe took 28.5%.
Overall sales by Hyundai and its smaller rivals fell a combined 10 percent in January as debt-laden domestic consumers were reluctant to shell out on new cars and this more than offset strong exports, Reuters said.
The weak sales were also due in part to a three-day Lunar New Year holiday in January. Local sales fell 39%, eclipsing a 27% jump in exports, Reuters added.
