SEOUL, Apr. 27 (Korea Bizwire) — Sales and profits at Hyundai Motor fell in the first quarter of the year in the midst of an unfavorable global environment. The Korean carmaker hopes to boost its sales figures by releasing a number of new cars and SUVs in the second quarter.
Hyundai released its earnings for the first quarter of 2018 via a conference call from its Yangjae-dong headquarters in Seoul on Thursday. The company stated sales came in at 22.4 trillion won while operating profits were tabulated at 681.3 billion won.
Both figures represent a significant reversal of fortunes for the company, with a 40 percent decrease in sales and a 45.5 percent fall in operating profits compared to the same period last year.
Net profit also fell to 731.6 billion won, which was a 48 percent decrease from 2017.
Experts attribute the poor performance to the overall decrease in global sales. In the first quarter, Hyundai sold 169,000 vehicles domestically, a 4.5 percent increase from a year ago thanks to the popularity of the Kona compact SUV, the Genesis G70, and a redesigned Sante Fe model.
However, in the larger markets of the United States and China, sales were sluggish. First quarter sales in the U.S. were down by 4.9 percent year on year with 27,200 vehicles sold. SUV sales rose by around 20 percent due to higher demand, but demand for sedans waned.
Sales in China were also slow, dropping by 17.1 with 163,000 vehicles sold. Sales in Europe (8.3 percent) and Asia, Middle East and Africa (7.3 percent) were up but not significantly enough to offset the slow sales in the U.S. and China.
In total, Hyundai’s sum global sales in the first quarter stood at 1.04 million vehicles, a 1.7 percent decrease from 2017.
Hyundai, in a statement, also noted the strength of the won against the dollar as a factor, in addition to the five day strike in early January during which production of 20,000 vehicles was affected.
To overcome internal and external difficulties, Hyundai will be releasing new vehicles in major markets. The redesigned Sante Fe is expected to hit the U.S. soon while China will be introduced to a new wave of SUVs such as the ix35 and Encino.
Gu Jayong, director of investor relations at Hyundai, said, “The car market in the U.S. is expected to shrink until 2020, but demand for SUVs is expected to rise continuously. The proportion of SUVs within the automobile market is expected to rise from 64 percent last year to 66 percent in 2020.”
In terms of the Chinese market, Gu said that he expects the introduction of new models in the second quarter to increase and stabilize sales.
H. S. Seo (email@example.com)