Hyundai Motor’s bleak results stretched into a 14th straight quarter as political headwinds continued to drag down sales in China, its biggest market, and higher incentives failed to boost business in the United States.
The South Korean firm – which together with affiliate Kia Motors is the world’s No.5 automaker together – has been betting on a gradual earnings recovery, but the plan hit a roadblock with China’s backlash over Seoul’s decision to deploy an anti-missile system showing no signs of abating.
For the second quarter ended June, Hyundai Motor reported a net profit of 817 billion won ($729.14 million), down 51 percent from a year ago – the 14th such decline in a row. Analysts on average had expected 1.35 trillion won. Its operating profit came in at 1.34 trillion won and sales at 24.31 trillion won.
Its China retail sales slumped 29 percent in the first half of 2017 as the automaker continued to struggle with its heavy reliance on sedans while customers increasingly opt for sport utility vehicles (SUVs) in the world’s biggest auto market.
Its weak brand image has also put Hyundai at a disadvantage versus local and global rivals such as Honda Motor, Toyota Motor and General Motors, all of which reported higher China sales for last month. GM, in its earnings call on Tuesday, said it set second-quarter sales record in China, although it also referred to pricing challenges.
Hyundai Motor plans to open a new factory in Chongqing in late August, hoping to offset some of its sales slide by tapping into the southwestern region, even as its other factories in the eastern region are underutilized. (Reuters)
