Hyundai's quarterly profit slides 23% on weak China sales
Hyundai Motor Co. said its third-quarter net profit fell 23 percent from a year earlier, as the South Korean automaker soaked up the impact of slower China sales and aggressive discounting campaigns.
Hyundai, ranked fifth in global auto sales together with affiliate Kia Motors, said its net profit from July through September slid to $1.1 billion (7.0 billion yuan), down from $1.3 billion a year earlier.
The company has been hit by lackluster sales in China and the United States, its two largest markets.
In the third quarter, Hyundai's sales in China slumped 18 percent as economic growth moderated and a summer stock market rout deterred buyers. None of Hyundai's models ranked among China's 10 best-selling SUVs in the nine months through September.
As sales went soft in China, Hyundai suffered its seventh straight quarterly profit drop. Hyundai and Kia slashed prices of SUVs in China after sales fell.
Competition, driven by currency moves, also has intensified for Hyundai. "During the third quarter, Japanese companies utilized the weak yen to focus marketing in the U.S. market. We increased [sales] incentives in response," CFO Lee Won-hee said during a conference call.
Lee said during the call that Hyundai's China sales will rebound in the fourth quarter, fueled by new model launches.
Korea Investment & Securities analyst Kim Jin-woo said he expects a better fourth-quarter performance thanks to new model launches and tax cuts on cars in South Korea and China, as well as the continued positive impact of the weakness of the won against the dollar.
The company has been hit by lackluster sales in China and the United States, its two largest markets.
In the third quarter, Hyundai's sales in China slumped 18 percent as economic growth moderated and a summer stock market rout deterred buyers. None of Hyundai's models ranked among China's 10 best-selling SUVs in the nine months through September.
As sales went soft in China, Hyundai suffered its seventh straight quarterly profit drop. Hyundai and Kia slashed prices of SUVs in China after sales fell.
Competition, driven by currency moves, also has intensified for Hyundai. "During the third quarter, Japanese companies utilized the weak yen to focus marketing in the U.S. market. We increased [sales] incentives in response," CFO Lee Won-hee said during a conference call.
Lee said during the call that Hyundai's China sales will rebound in the fourth quarter, fueled by new model launches.
Korea Investment & Securities analyst Kim Jin-woo said he expects a better fourth-quarter performance thanks to new model launches and tax cuts on cars in South Korea and China, as well as the continued positive impact of the weakness of the won against the dollar.
