Despite slow Chinese and European markets, Hyundai was able to beat the odds and increase its net profit by almost a third to $2.15 billion for the first three months of 2012. Hyundai also posted KRW2.45 trillion in net profit for the first quarter of 2012, up from KRW1.88 trillion for the same period in 2011.The figures were way higher than a consensus forecast of KRW2.07 trillion from Thomson Reuters.
This also marks the period when Hyundai posted record sales after changing accounting methods a year ago. Hyundai’s first quarter feat is a sharp contrast to the dismal performance of the European car market, which dipped 8 percent. Hyundai was able to beat the odds in Europe by introducing new models like the i30 compact, which sold 101,328 units in 2011, making it Hyundai's best-selling model in the continent, according to market researchers JATO Dynamics.
The company expects the same trend to be repeated for the rest of the year. Hyundai expects to remain bullish for the rest of the year, as it anticipates a 15.4% increase in sales to 465,000 vehicles this year, while the very weak European market is expected to drop by 5 percent.
Due to its strong performance in Europe, Hyundai’s shares have risen close to 13 percent this month, while Japanese rivals Toyota, Honda and Nissan, and other major carmakers Ford, General Motors and Volkswagen have all fallen. Kim Dae-hwan, fund manager at Shinyoung Asset Management, expects Hyundai to continue its upward trend in the second quarter, especially with the recovering US market and the slowdown in Europe and China.
In China, foreign brands like Hyundai are “performing well," said Kim Dae-hwan. Hyundai had once been criticized for its poor quality, boxy cars, but with the leadership of Chairman Chung Mong-koo, it has improved its quality and it is now the envy of its rivals for selling stylish models at affordable prices even when the industry is in an economic turmoil.
This week, French automakers PSA/Peugeot-Citroen and Renault this week posted sales declines of 7 percent and 8.6 percent respectively in the first quarter as the French market fell by almost a fifth.