The largest South Korean automaker’s net profit came to 1.79 trillion won ($1.55 billion) during the April-June period, down from 2.35 trillion won a year earlier, the company said in a regulatory filing.
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SEOUL South Korea’s Hyundai Motor Co (005380.KS) said its net profit slumped for the sixth quarter in a row, in line with forecasts, as weak sales in key markets like China and the United States and the won’s strength continue to shackle the automaker. The Seoul-based company will also add new dealers to increase sales in western China, he said.
Analysts say Hyundai is more vulnerable to the shift in Chinese buying tastes than other foreign brands because the Korean auto maker lacks a competitive lineup and is less active in marketing than its rivals. Those were falls of 1.4 percent and 17.1 percent each on a yearly basis.
Earlier this month, Hyundai and Kia’s Chairman Chung Mong Koo said Greece’s potential exit from the euro, falling interest rates in the U.S., and stagnant economic growth in China are expected for the remainder of the year.
The automaker is counting on revamped model launches set for the second half of this year to help it reverse out of the trend.
The maker of Sonata sedan said it plans to bring forward the launch of new vehicles and increase the production of sports utility vehicles, which have been increasingly popular.
The sequence of profit drops has discouraged investors, with shares having fallen about 22.5 percent so far this year as of Wednesday’s close.
Hyundai planned to roll out new models to overcome the difficulties, keeping its auto sales target of 5.05 million units this year.
POCOG president Yang-ho Cho proclaimed, “We deeply appreciate Hyundai & Kia Motors’ decision to join the sponsorship program”.
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The dividend is the latest measure announced by Hyundai to appease shareholders who pressured the company to increase returns after a $10 billion land deal last year sent its stock price down.
