Hyundai Motor profit surges 35% in 2011

(Yonhap News)

Korean auto giant aims to sell a record 7 million vehicles worldwide this year


Hyundai Motor Co.’s annual profit jumped 35.1 percent last year on surging demand from North America and India, wrapping up a good year in which it beat its Japanese rivals.

Net profit came in at 8.1 trillion won ($7.1 billion), up 35.1 percent from 6 trillion won a year earlier, the company said in an earnings report Thursday. Its fourth-quarter profit came in at 2 trillion won, marginally missing the 2.24 trillion won average of analysts’ estimates compiled by Bloomberg.

“The industry had no doubt that Hyundai would have a good year. A lot of factors including the won-dollar exchange rate, and growing brand reputation in emerging markets worked in favor of the carmaker,” said Ahn Se-hwan, a motor analyst at IBK Securities.

The profit at the world’s fifth-largest car seller topped the combined estimated earnings of Toyota Corp. and Nissan Motor Co., whose second-quarter production suffered from the devastating earthquake in Japan last year.

Hyundai Motor shares dropped 2.14 percent to 229,000 won at the close in Seoul. Its stock climbed 23 percent in 2011.

“Hyundai is achieving some cost cuts from integrating their production platforms. More vehicles will go through the streamlined version of their platforms in the future and further increase their performance,” Ahn said.

Other analysts attributed the strong fourth quarter performance to competitive pricing and the strong Japanese yen, making Korean carmakers more attractive in the global market.

The company said it aims to sell 465,000 vehicles, a 15.4 percent increase, in sales from Europe this year with the new i30 model.

“The market isn’t in the best shape in Europe, but it is an opportunity for us to boost market share,” Lee Won-hee, executive vice president and CFO said during an earnings conference call.

Hyundai Motor Group, which also includes Kia Motors Corp., is seeking to sell a record 7 million vehicles this year.

“In order to achieve the 7 million target, we have to keep up with fast-changing global trends by setting up an organized cooperation system for better communication among our production facilities and sales locations across the world,” Chung Mong-koo said in a New Year’s message to group officials.

Hyundai and its affiliate Kia Motors broke the 2 million unit line in exports for the first time last year. Total exports came in at 2,282,645 units with Hyundai logging 1,193343 cars and Kia posting 1,089,302 cars.