Rising won blamed for Hyundai’s profit drop in last quarter of 2012

Article by Anita Panait, on January 25, 2013

Hyundai Motor Co. posted a 5.5-percent year-on-year drop in consolidated net profit for the quarter ended Dec. 31, 2012, to KRW1.893 trillion ($1.8 billion), no thanks to a stronger South Korean won that chipped off the carmaker’s overseas earnings. The South Korean won gained nearly 8 percent against the US dollar in 2012, thereby reducing the value of Hyundai's overseas revenue in local currency terms and hitting its price competitiveness abroad.

Hyundai's competitive edge shifted back to its Japanese rivals, after the yen weakened by 11 percent in 2012. It is quite ironic that Hyundai would post a decline in net profit in the fourth quarter of 2012, since the South Korean carmaker sold a record 1.23 million vehicles in the period. Because of the recent development, Hyundai will now be pressured to roll out new models to entice growth as well as to depend more on the Chinese vehicle market.

Lim Hyung-geun, a fund manager at GS Asset Management, told Reuters that with the weakening yen and rising won, Hyundai's ability to prevail over worsening external factors will be put to the test this year. He added that with no major new cars planned for 2013, Hyundai will have a very challenging year.

Lim noted that Hyundai is not yet a true global leader like Samsung Electronics that could resiliently overcome adverse currency moves. Lee Won-hee, Hyundai's Chief Financial Officer, warned that the gain will continue to rise in the second half of 2013, but assured that its effects will be limited since the carmaker will be moving more production overseas.

Topics: hyundai, profit

If you liked the article, share on:

Comments

Recommended

McLaren has already shown some interest in electrifying their models. And initially, we thought that they will just use hybrid systems to use across their current lineup. Nevertheless, we have...
by - August 19, 2017
Fifty years after its glorious victory at the 24 Hours of Le Mans, Ford launches the 2018 Ford GT ’67 Heritage Edition at the 2017 Monterey Car Week. The red...
by - August 18, 2017
Hyundai has recently unveiled an unnamed pre-production model of its new fuel cell SUV. We don’t know what to call this model just yet, but sources say that this model...
by - August 18, 2017
This weekend at the 2017 Pebble Beach Concours d’Elegance, the BMW Z4 Concept will make its first public appearance. The good news is that we will finally have a real...
by - August 18, 2017
While Honda’s new 2018 HR-V will be rolling out at the dealerships with just a few updates, the company is certainly not giving up its spot as the best-selling vehicle...
by - August 18, 2017
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