Hyundai Triples Profit on Weaker Won, US Sales Jump
Oct. 22 (Bloomberg) -- Hyundai Motor Co., South Korea’slargest automaker, more than tripled third-quarter profit on theweaker won and surging sales in the U.S. and China.
Net income jumped to a record 979.2 billion won ($827million) from 264.8 billion won a year earlier, the Seoul-basedcarmaker said a filing today. That beat the 532 billion wonmedian of 22 analyst estimates compiled by Bloomberg. Sales rose34 percent to 8.1 trillion won.
Hyundai’s U.S. sales jumped 29 percent, helped by demandfor the Elantra compact, the fifth-bestselling model under thegovernment’s “cash-for-clunkers” rebate program. The automakeralso benefited from a 14 percent weaker won, while Toyota MotorCorp. and Honda Motor Co. struggled with a stronger yen.
“The global government incentives were critical boostersfor Hyundai’s performance,” said Chang In Hwan, chief executiveofficer at KTB Asset Management Co., which manages theequivalent of $6.9 billion of assets in Seoul. “Coupled withthe weaker won, they made Hyundai a real global player.”
Operating profit surged more than fivefold to 586.8 billionwon. Hyundai’s third-quarter global sales to retail customersjumped 35 percent from a year earlier to 854,597, according tocompany data. Its share of the global market rose to 5.5 percentfrom 5 percent in the first half, the company said. Domesticsales rose 44 percent while overseas sales gained 33 percent.
U.S. Sales
In the U.S., the automaker’s sales surged 47 percent inAugust to a record 60,467 vehicles, helped by the clunkersprogram, which produced almost 700,000 automobile salesindustrywide. The government program, which ran from July 27through Aug. 24, provided rebates of as much as $4,500 to buyerswho traded in old vehicles for new, more fuel-efficient ones.
In the first nine months, Hyundai boosted U.S. sales 1.3percent to 342,217. By comparison, Toyota’s sales fell 28percent, in line with the overall market. The Japanese automakeris forecasting a 450 billion yen ($4.9 billion) net loss in theyear to March, its second unprofitable year in a row.
Kia Motors Corp., Hyundai’s affiliate and South Korea’ssecond-biggest carmaker, increased nine-month U.S. sales 4.6percent to 238,570 vehicles. It will report earnings tomorrow.
The won averaged 1,239.74 against the dollar in the thirdquarter compared with 1,065.78 a year earlier. It was at1,177.75 per dollar as of 10:03 a.m.
China, India
Hyundai’s China venture nearly tripled third-quarter salesto 155,396 vehicles and its India plant boosted sales 17 percent.
The company introduced a revamped Tucson compact sport-utility vehicle in August and a new version of the Sonataflagship sedan in September.
“The new-models effect will continue to drive sales athome and overseas through the fourth quarter,” said Song SangHoon, an analyst at Kyobo Securities Co. in Seoul.
Growth may slow next year as governments end stimulusmeasures and the won strengthens, said KTB’s Chang. The Koreancurrency has appreciated about 30 percent since hitting an 11-year low in March, undermining Hyundai’s edge over Toyota.
“Whether Hyundai can sustain the growth shown this year isin doubt,” Chang said. “We see the won gaining, andgovernments’ economic support will likely disappear from nextyear.”
To contact the reporter on this story:Seonjin Cha in Seoul at scha2@bloomberg.net
Last Updated: October 22, 2009 01:14 EDTSource: Bloomberg
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