Hyundai may post lower profit in first quarter of 2013

Article by Anita Panait, on April 26, 2013

Hyundai’s profit in the first quarter of 2013 may likely shrink, no thanks to production stoppages in South Korea and the won strength against the yen. A lower-than-expected result would place more pressure on Hyundai to produce more cars outside its home base of South Korea. Hyundai is expected to release on April 25, 2013, its first quarter results, which may reflect an 18-percent dive in net profits to KRW2 trillion ($1.79 billion), according to Thomson Reuters I/B/E/S.

Such drop would mark the second straight quarterly profit decline by Hyundai, which may have suffered from possible costs related to recalls of over 1 million vehicles globally. While Hyundai has managed to outsell competitors like Toyota Motor Corp and General Motors Co during the global economic downturn with its low-cost cars, the carmaker is now badly hit by the rising South Korean won combined with the weakening Japanese yen, as well as labor issues in South Korea.

Hyundai's South Korean labor union staged a series of production stoppages during weekends in March and April, resulting in lost production worth $850 million. South Korea accounts for around 40 percent of Hyundai’s total production. Production issues at home may prompt Hyundai to expand its capacity in the United States and China, according to analysts.

Suh Sung-moon, an auto analyst at Korea Investment & Securities, remarked that labor problems in South Korea “make it inevitable for Hyundai/Kia” to increase overseas production. He noted that even without labor issues, Hyundai's portion of overseas production is lower than its Japanese rivals. Hyundai, when combined with affiliate Kia Motors Corp., is the fifth-largest carmaker in the world.

Topics: hyundai, profit

If you liked the article, share on:

Comments

Login or Create new account to add a comment!

Recommended

In the minivan segment, the 2017 Chrysler Pacifica is already impressive in terms of fuel economy figures – as rated by the United States Environmental Protection Agency. In fact, the...
by - December 2, 2016
Having a blacked-out Bentley Mulsanne Speed is already menacing by itself but by naming it as the Bamford X, it became all the more imposing. This model was made by...
by - December 2, 2016
We have good news for those who are waiting for the latest version of the Mazda CX-5 compact crossover. It was just unveiled in November at the 2016 Los Angeles...
by - December 2, 2016
Those familiar with racing know that Marco Wittmann’s win during the 2016 Deutsche Tourenwagen Masters held last May was noteworthy as it was his second title in four seasons. In...
by - December 2, 2016
Volvo has revealed that while its products are used by a number of police organizations around the world, it will be the Swedish police that will get the first chance...
by - December 2, 2016
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries