Hyundai fourth-quarter profit slips as US discounts, emerging market slowdown bite

Hyundai Motor Co. reported another quarterly earnings decline Tuesday, hit by slowing demand in China and emerging markets, and by fierce competition in the US that pushed up marketing costs.

For the final quarter of 2015, its net profit was 1.53 trillion won ($1.27 billion), down 8 percent compared with 1.66 trillion won a year earlier.

That was in line with the 1.6 trillion won average estimate of 15 analysts polled by Thomson Reuters.

Overseas plant sales saw a drop in profitability, especially in Russian Federation and Brazil, amid sharp fall in emerging market currencies dragging down profits repatriated into home.

The company said that its operating profit ratio stood at 6.9 percent last year, down 1.5 percentage points from a year earlier.

According to the Society of Indian Automobile Manufacturers (SIAM) on January 24, Hyundai Motor sold 476,001 units in India last year, up 15.7 percent from a year ago.

“We will keep making hedging efforts by expanding the ratio of locally produced auto parts and the ratio of exports of vehicles being manufactured in local markets”, Lee Won-hee, Hyundai Motor’s chief financial officer, said during a conference call.

The company sold a total of 4.96 million vehicles in 2015, short of its initial target of 5.05 million, Lee said, predicting overall sales of 5.01 million units in 2016.

For the business upturn, the company officials said that the automaker will focus on enhancing its future competitiveness and consolidate the sustainable growth base this year. It was slightly up from the previous year’s 4,961,877 units. Hyundai and its affiliate Kia Motors Corp. plan to expand their lineup of eco-friendly cars to meet the more stringent emission standards in markets including China.

Shares of Hyundai fell 0.7 percent in Seoul trading as of 2:14 p.m. The benchmark Kospi index slid 1.1 percent.