Despite high expectations and incredibly good sales, Hyundai has lost profit due to the currency, oil prices, and a variety of other factors.
Hyundai earned 546.93 billion won ($542.1 million) in the three months ended June 30, the company said in a regulatory filing. That was 10.6% lower than the same period last year. Sales during the quarter rose 12.8 percent to 9.12 trillion won ($9.03 billion) from 8.08 trillion won.
Hyundai officials did not immediately have an answer for the decline in overall profit. The shock of the profit drop was apparent to many, even to analysts that provided a basis for yesterday’s story of expected record profits for the South Korean automaker. It turned out that nobody accounted for the possible issues with currency and costs.
In fact, the won’s 5 percent decline against the euro and dollar in the period raised the value of Hyundai’s overseas debt and forced the company to more than triple funds set aside to cover warranty costs to 252 billion won. The losses offset a 16%rise in sales of Elantra compacts, Sonata sedans and other vehicles.
The automaker’s currency-related losses totalled 150 billion won in the first half.
So regardless of the estimates and potential figures, anything can happen in the world of automotive sales. The Hyundai dealer outlets may be doing well internationally, but the decline in currency and the changes to the industry always wind up being more significant than thought. Hyundai will continue to do well in terms of sales, but must combat the changing markets.
