Performance aided by emphasis on product-quality than mass production


Hyundai Motor reported a record performance on the back of improved profitability despite sluggish sales at home.

The nation’s largest carmaker said Thursday that it posted 2.28 trillion won ($2.02 billion) in operating profit during the first quarter of 2012, up 24.9 percent from the same period last year.

This marked all-time high quarterly earnings for the automaker. Company executives attributed the performance to a product quality-oriented management policy.

Thanks to a change in the assessment method of financial statements, its net profit also surged by 30.6 percent on a year-on-year basis to 2.45 trillion won.

“Despite external uncertainties from the eurozone debt crisis, we could achieve remarkable improvement in profitability by putting priority on vehicle quality over mass production,” a Hyundai spokesman said.

He said the company will continue to closely monitor the coming market situations, citing sagging domestic consumption as well as shakiness in European countries.

In the first quarter, Hyundai Motor recorded combined vehicle sales of about 1.07 million units in the local and overseas markets, up 16.7 percent from a year before.

The company saw its sales at home post 154,855 units in the first quarter, down 7.1 percent from 166,749 units over the same period in 2011.

For March sales, the nation’s largest automaker reported a 9.5 percent drop with 56,022 units at home, compared with 61,932 units a year earlier.

By contrast, its exports, including production at overseas factories, grew 21.6 percent from 749,933 units in the first quarter of 2011 to 911,805 units in the same quarter of 2012.

Hyundai posted all-time high monthly sales in the European market in March, despite the worsening business environment due to the debt crisis. It reported 13.8 percent growth with sales of 50,131 units

In the United States, the company saw its sales reach an all-time high last February. It sold 51,151 units in that month in the U.S., up 18 percent from 43,533 units a year earlier. It is a record performance for the carmaker’s February sales.

Sales of the Sonata and Avante, called the Elantra in the U.S., came to 17,425 and 13,820 units, respectively.

Hyundai Motor has recently been prioritizing upgrading its brand image across the globe, shifting from its earlier business focus of expanding market share overseas.

The world’s fifth-largest automaker has revealed its ambition to cultivate brand power approaching the level of top global brands such as BMW and Mercedes-Benz.

“Hyundai Motor has been successful in selling many cars. But the performance in brand power is lagging behind in the overseas markets,” a company executive said in a statement.

“So we have decided to put more investment in improving the brand image,” he said.

By Kim Yon-se (kys@heraldcorp.com)