The South Korean automaker said profits slipped again in the last quarter of 2015, because of more discounts offered in the US and a slow demand in emerging markets.
It was for the eighth consecutive quarter in which Hyundai’s profits dropped, partly because of company’s efforts to stimulate the US sale by promoting discounts, partly because of a flat demand in emerging markets. The world’s fifth-biggest automaker, alongside its sister Kia Motors, said October-December net profit fell to 1.63 trillion won (around 1.36 billion dollars) from 1.66 trillion won in the same period a year earlier. This financial outcome was in line with the estimates of most business analysts. With a 6.42 trillion won net profit in 2015, last year’s result was Hyundai’s lowest annual profit in five years, and the automaker does not foresees better prospects for 2016. “We expect the uncertainty surrounding the global auto market to persist this year,” Hyundai said in a statement. Analysts said the slip was because the company ratcheted up inventories and sales incentives in the fourth quarter as it increased the production towards the end of the year to stave off a drop in annual sales. Fourth-quarter operating profit dropped 19 percent to 1.52 trillion won, Hyundai said, while revenue rose 5 percent to 24.76 trillion won.
Hyundai Motor’s cumulative global sales for 2015 remained flat over a year earlier, with a total of 4,964,837 units delivered. The December demand rose by 8.5 percent year-on-year to 516,359 units, with the overseas sales accounting for 434,299 vehicles, a 6.8 percent increase. The automaker announced 5,010,000 units for its 2016 global sales target, with 693,000 units for the domestic market and 4,317,000 units overseas.