The South Korean automaker announced its net profit took a dive for the sixth consecutive financial quarter, as previously envisioned by forecasters, as the slow sales in crucial markets such as China and the US coupled with currency headwinds affected the company.
Hyundai Motor, together with affiliate Kia Motors the world’s fifth largest automaker, announced Thursday the net profit slumped fell 24 percent to 1.7 trillion won in April-June from 2.2 trillion won during the same period last year. Hyundai also announced that its largest single market, China, registered a slump of around 8 percent during the quarter in terms of sales because of growing competition and slowing economic growth in the world’s second biggest economy. Profit also took a dive as the company had to increase incentive and subsidy spending to lure customers in China and the United States, the first and second largest auto markets in the world – Hyundai, which has a smaller sports utility vehicle range, had to relinquish some market share to rivals that offered more alternatives in terms of crossovers, SUVs and pickup trucks. The increase in popularity of foreign brands at home has also undercut its traditional dominant position of the South Korean market.
Currency swings were also disadvantageous for the automaker, with the local currency gaining 11.5 percent against the yen and 16.4 percent against the euro on average during the second quarter from the figures last year, which allowed Japanese and European rivals to have the upper hand in overseas markets. The automaker’s shares this year have dropped around 23 percent and hover near their lowest point in almost half a decade.