Hyundai Motor Co. posted around 6 trillion won in net profit in 2015, the lowest in five years. The fourth quarter’s operating profit fell 19.2 percent YoY to stand at 1.151 trillion won.
In announcing its performance record for 2015 on Jan. 26 at its Yangjae-dong head office in Seoul, the largest motor company in Korea, said sales of its cars came to 4.963 million units, up 3 percent YoY, the largest in its history, valued at 91.958 trillion won. Operating profit slid to 6.357 trillion won, down 15.8 percent YoY, the lowest since 2010. Net profit for 2015 amounted to 6.591 trillion won, down 14.9 percent YoY. The operating profit ratio compared to sales came to 6.9 percent, down 1.6 percent from the previous year.
The fall in operating profit has been attributed to a rise in costs affected by the reevaluation of the currency values of emerging nations and an increase in investments in R&D, which rose 1.5 percent from the preceding year, despite the increased sales of the vehicles around the world, the officials of the motor company said. They added that the investments in R&D had to occur to continue to produce better cars and lead the global car market in line with the car maker’s key strategy.
Hyundai Motor forecasts that an unfavorable business environment is likely to continue in 2016. Emerging markets including China will continue posting slower growth. Growing geopolitical risk and low oil prices will lengthen economic stagnation, leading to steeper competition amongst automakers.
Nevertheless, Hyundai Motor will continue its efforts in establishing sustainable growth with R&D investment to strengthen state-of-the-art technology development and secure eco-friendly technology leadership.
Hyundai Motor aims to sell 5.01 million vehicles globally in 2016 (693,000 in Korea and 4.317 million overseas). It plans to achieve its goal with new model launches like All-new Elantra, the brand-new IONIQ, which is offered in three eco-friendly powertrain (HEV, PHEV, Full-EV) and Hyundai Motor’s luxury brand Genesis G90 (EQ900 in Korea) large luxury sedan in 2016 to major global markets.
Hyundai Motor will continue strengthening cooperation with suppliers and actively carry out Corporate Social Responsibilities to create more value for customers and stakeholders alike.
For the first nine months of 2015, sales revenue increased 2.3 percent to 67.19 trillion won (52.64 trillion in autos and 14.54 trillion in finance and others) from a year earlier. Revenue increase of finance and others was the main reason for sales revenue increase.
However, operating profit and net profit fell 14.7 percent and 16.9 percent to 4.84 trillion won and 4.98 trillion won (including non-controlling interest), respectively.
Hyundai Motor’s cumulative global sales for the first nine months totaled 3,537,573 units (497,867 in Korea and 3.039,706 overseas:), a year-on-year decrease of 2.4 percent. Stagnant demand for passenger vehicles and impact from currency fluctuations are the main reasons for the global sales drop.
In the third quarter alone, sales revenue increased 10.1 percent to 23.43 trillion won (18.29 trillion in autos and 5.14 trillion in finance and others) with global sales of 1,121,796 units. However, both operating profit and net profit declined 8.8 percent and 25.3 percent to 1.50 trillion won and 1.21 trillion won, respectively.
Hyundai Motor’s sub-compact SUV Creta and the newly introduced all-new Tucson are continuing their new model launch effects. In addition, the introduction of all-new Elantra will also likely refresh Hyundai Motor’s sales momentum.
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