Hyundai Motor Reports Lowest Quarterly Earnings In Over Five Years; South Korean Automaker Reports Q3 Net Income At 1.2 Trillion Won
Hyundai Motor Co. reported its lowest quarterly earnings after over five years on Thursday. South Korea's largest carmaker has recorded a net income of 1.2 trillion won for the third quarter of this year.
The Associated Press forecasted on the same day that Hyundai's net income tumbled over 25 percent from the previous year. In addition, "the result, its worst since the first quarter of 2010, was below even the lowest estimate by analysts."
According to reports, the recorded low earnings of Hyundai motor is caused by the slump of sales in China markets. However, the car manufacturer is bullish that the company's sales will get better in the present quarter, as noted by Financial Times on Thursday.
Hyundai Motor has recorded its seventh successive quarterly decline in income last quarter. Also, the company's operating income dropped 8.8 percent to 1.5 trillion won, whereas sales increased by 10 percent to 23.4 trillion won.
Further reports have revealed that the South Korean carmaker's global deliveries dropped for three consecutive quarters which is a result of the frail demand in China, Russia and Brazil, Bloomberg reported on the same day.
Hyundai Motor hopes that its new models and tax cuts in China and South Korea will help improve the sales of the carmaker.
"We expect sales in China to turn around from October," says chief financial officer Lee Won Hee.
"We are a sedan-based carmaker, and as you know, global demand for sedans slowed while demand for RVs and SUVs rose, and our production capacity couldn't keep up with the demand for our RVs and SUVs," he says.
Lee adds that the company is developing the production of its Tucson SUVs in its plant in Ulsan, South Korea to meet the growing demand.
On the other hand, the South Korean automaker reportedly plans to launch 22 new environment-friendly models in 2020 following the cheating emission test scandal that involved German carmaker Volkswagen.
"Following the Volkswagen scandal, consumers could temporarily shift to gasoline cars but they would opt for hybrid or electric vehicles in the long term," says Nomura analyst Angela Hong. "Still, Hyundai lacks technology on this front."