South Korea’s largest automaker, Hyundai Motor, has missed analyst estimates after it reported its fourth consecutive quarterly profit drop, weighed down by the dreary economic situation in Russia and by increased incentives in America.
Hyundai, the world’s fifth-largest carmaker when joined by affiliate Kia Motors has seen net profit for the October-December period slide 19 percent from a year ago to 1.66 trillion won ($1.53 billion), missing the 1.98 trillion won average forecast compiled by Reuters from the poll of 14 analysts. The automaker said in a statement that a decline was registered even though revenue soared 8 percent to 23.57 trillion won buoyed by the weaker won that helped exports and global sales saw strong demand. The latest result, with sales increasing and the local currency helping exports but with the company unable to increase profits, could fuel already disgruntled investors – angered last year by the group’s decision to get involved in a controversial $10 billion property acquisition.
The automaker faced numerous headwinds last year, with increased economic stress in Russia – where Hyundai is the second largest auto company, after the local Lada brand – and an even weaker yen making Japanese cars cheaper to be sold in the United States, Hyundai’s second biggest global market. The Russian division is expected to have turned losses in the fourth quarter, while in the US Hyundai had to increase incentives to combat Japanese rivals and spur demand for its mainstream models such as the Sonata and Elantra sedans.