Hyundai Motor pledged to enhance management ― focused more on profitability than business expansion ― as its earnings for the July-September period slightly dropped compared to the previous quarter.
Though the carmaker’s third-quarter operating profit came to 2.05 trillion won ($1.83 billion), up 3.1 percent from a year earlier, the figure is lower by 17.8 percent from the previous quarter, Hyundai Motor said in a regulatory filing on Thursday.
Ambassador to the European Union and Belgium Kim Chang-beom (center) poses with EU parliamentarians during an event to test-drive a fuel-cell vehicle of Hyundai Motor in Strasbourg, France, on Wednesday. (Yonhap News)
In the same vein, Hyundai’s sales and net profit increased by 3.6 percent and 12.9 percent to 19.6 trillion won and 2.1 trillion won, respectively, on a year-on-year basis. But the two sectors fell by 10.5 percent and 15 percent compared to a quarter before.
“The quarter-to-quarter drop in earnings is attributable to weaker production capacity from labor disputes as well as the prolonged slump in domestic sales,” a company spokesman said.
“Uncertainty over the business environment still continues,” he said. “To achieve the yearly target, we would push for production of quality-oriented vehicles and creative marketing strategies.”
Management “prioritizing profitability” will guarantee sustainable growth, which is initiated by Hyundai Motor Group chairman Chung Mong-koo, he stressed.
In particular, the automaker has decided to take on major global automakers in emerging markets.
“We will surpass competitors by stabilizing manufacturing capacity at recently launched assembly lines ― the third factory in China and the first one in Brazil,” the company said.
The company is targeting 10 percent of Brazilian car sales with an annual production of 150,000 vehicles at its new plant in Piracicaba in Sao Paulo state.
In 2010, without a factory in Brazil, Hyundai reached a market share of 3 percent. With local production, the figure is projected to reach 10 percent, possibly overtaking Ford Motor, according to company executives.
For Europe in fiscal woes, it plans to release cars specially designed for European consumers’ appetite and for the U.S. market, it is seeking to bolster regional sales-marketing amid high competition.
Meanwhile, Kia Motors, an affiliate of Hyundai Motor, will make public its third-quarter earnings on Friday.
By Kim Yon-se (kys@heraldcorp.com)
