Hyundai Motor, South Korea’s largest automaker and the fifth biggest in the world when taken together with affiliate Kia Motors, recently reported its profits during the first three months have fallen for the fifth straight quarter.
The fifth consecutive profit slump at the carmaker was triggered by rising incentives in the crucial United States market and by the weakness associated with currency shifts that limited offshore revenue. Hyundai Motor announced its net profit slid 1 percent to 1.91 trillion won ($1.77 billion) in the January to March period compared to 1.93 trillion won in the first quarter of 2014. The result was expected by industry analysts and some of them even predicted a larger drop in profit, but the quarterly slide and possible second quarter similar data will add pressure on the automaker to lift production of sport utility vehicles (SUVs) and trucks – which are growing in demand across the US, China and European markets. “We expect earnings to improve going forwards,” commented the company in the statement announcing the financial results, forecasting improved deliveries as the new Tucson SUV is being rolled in more markets overseas.
Late last year both Hyundai and Kia lifted their 2015 sales goal – but the forecast could prove optimistic due to a number of factors. Its usually strong mainstay sedan models have started to experience a loss in demand, lifting inventories and forcing incentives up. Additionally, currency woes in regions such as Russia, Brazil and Europe intensified because of the stronger South Korean won – more than 85 percent of the brand’s sales are made outside of its home country.