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Hyundai Motor’s profit falls despite strong sales

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Published : 2014-01-23 20:34
Updated : 2014-01-23 20:34

A worker takes notes as he inspects Hyundai Motor Co. vehicles bound for export at a port near the company's plant in Ulsan, on Thursday. (Bloomberg)

Hyundai Motor’s global operating profit slid by 1.5 percent in 2013 to 8.31 trillion won ($7.75 billion) as the carmaker struggled against a strong domestic currency, the company said on Thursday.

Hyundai performed better abroad, with total sales rising by 3.4 percent from 2012 to 87.307 trillion won. But its global sales were eclipsed by sluggish domestic sales that were triggered by an influx of imported cars.

Its repeated strikes also did not help with domestic sales, industry observers said.

According to Hyundai’s regulatory filing, it sold a total of 4,732,366 cars overseas last year to record 71.5 trillion won in car sales. Kia’s figures will be disclosed on Friday.

In Korea, the world’s sixth-largest carmaker sold 640,698 cars, reflecting a 4 percent decline from 2012.

Profit was less than 10 percent, its lowest rate since 2010.

Analysts, however, claimed that Hyundai’s records weren’t too bad.

“What is impressive about Hyundai is that the carmaker has managed to maintain operating profit to well above 9 percent, while market competitors barely make it around 5 percent, except for Toyota,” a business analyst said.

The prospect for Hyundai is therefore bullish, he said, pointing out that the company is planning to boost production shortly by establishing a new American production plant and combining state-of-the-art information technology with its autos.

Hyundai has recently signed a contract with the U.S.’ No. 1 telecommunications service provider Verizon to offer Wi-Fi in its U.S. cars and trucks, starting with the Genesis sedan in May. It will also soon be applied to Kia cars, the company said.

“We found the U.S. to be the ideal market because its IT infrastructure, including Verizon’s technology, was optimal for Blue Link performance,” said Park Min-hyung, a Hyundai Motor spokesman.

Unveiled at the consumer electronics show in Las Vegas earlier this month, the technology allows drivers to open or lock the doors, turn on the engine as well as navigate the roads. The Blue Link service will be integrated with Google tools including Google Maps and Google Glass. Initially, cars will use 3G wireless service and eventually will feature faster 4G and Long Term Evolution technology.

Hyundai and Kia are expected to sell a combined 1.2 million cars in the U.S. this year.

By Bae Ji-sook (baejisook@heraldcorp.com)

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