Hyundai Motor, South Korea’s largest automaker, revealed its first profit growth in four quarters after sales went up in China and demand for hatchbacks buoyed deliveries in Brazil.
Hyundai shares were actually down 1.9 % to 253,500 won at the close in Seoul trading. The shares have never the less grown 16 % this year, compared with the 2.5 % advance in the benchmark Kospi Index.
“I expect Hyundai to struggle a bit for the time being as the won is strengthening and they don’t have new volume models coming up until next year,” said Heo Pil Seok, chief executive officer at Midas International Asset Management Ltd., which oversees about $7.5 billion including Hyundai’s shares. “The Sonata sedan may help profits once it goes on sale next year.”
Third-quarter net income grew 5.6 percent to 2.14 trillion won ($2 billion) from a year earlier, the Seoul-based company said today. That’s pretty close to the 2.15 trillion won average of 25 analysts’ estimates, compiled by Bloomberg.
Deliveries in China climbed 15 % and sales from its Brazil factory reached a record a year after beginning local production. Hyundai expects the new Sonata, which took by storm the U.S. midsize sedan market when it was last overhauled in 2009, to further bring demand when it goes on sale next year.
The company is addressing the increased demand in China by expanding its third manufacturing facility, increasing production capacity by 150,000 units a year from January next year, bringing the automaker’s total production capacity to 1.05 million units.