Hyundai Motor Co. posted KRW1.93 trillion ($1.86 billion) in net profit in the first quarter of 2014 – a figure similar to results in the same period in 2013. The carmaker’s results come as a surge in sales in China and South Korea helped offset lower demand for U.S. demand. The mean estimate of 13 analysts polled by Thomson Reuters places Hyundai’s first-quarter net profit at KRW2.19 trillion.
The carmaker saw its revenues surge only 1 percent to KRW21.65 trillion. Sales fell 3 percent in the US, where the company reshuffled its management and issued a product recall. Hyundai’s seemingly flat results were due to a stronger won that possibly rendered its Korean-made products more expensive overseas as well to new models paraded by its rivals.
The South Korean won traded close to a six-year high in April 2014, cutting the value of overseas earnings converted into the currency. Hyundai could hope for its refreshed Genesis and Sonata to help it compete better against rivals in the US, where it issued a recall in 2013 over a brake switch issue.
The recall has cost the company KRW90 billion ($86.74 million). Hyundai has been posting sales growth in China and has tasked its local head to hasten the construction of a fourth site in the country.
The carmaker’s additional capacity at its third Chinese site helped Hyundai post a 9-percent surge in sales in the first quarter. Hyundai logged a 5-percent rise in sales in its home turf South Korea as boosted by its luxury Genesis and a recovery in production following a labor row in 2013.
Hyundai could see its domestic sales increase in the second quarter following the launch of the revamped Sonata late March. The sedan, however, has to stave off challenges from foreign models like the Volkswagen Passat and the Toyota Camry, which are benefiting from free-trade agreements. [source: Hyundai]