Posted by: Moon Ihlwan on October 22, 2009
No other market showed higher growth in auto sales than China this year and no other major automaker outperformed Hyundai Motor there. That more or less explains the South Korean carmaker’s amazing financial results at a time its rivals struggle to navigate through the industry’s worst downturn in memory. Hyundai said Oct. 22 its net profit in the three months ended September hit a new quarterly record of $832 million, up from the previous record of $690 million three months earlier and more than triple $225 million a year ago.
In China, Hyundai sold 412,000 vehicles in the first nine months of this year, up 88% from the same 2008 period. The rise, more than double the pace of a 43% gain in China’s overall car sales during the period, increased Hyundai’s market share in the country to 7.2% from 5.5% last year. Hyundai now sells more cars than Toyota, Honda and Nissan in China.
Hyundai also scored big in the other crucial market in the world: the U.S. In the first nine months, its U.S. sales rose 1.3% to 342,000, while Toyota’s sales fell 28% in line with the overall market. In the month of August, when carmakers were benefiting from the government’s cash-for-clunkers program, Hyundai’s sales surged 47% to a record 60,467 vehicles. In the global market, Hyundai’s share jumped to 5.5% in the third quarter of this year, up from 4.4% a year earlier.
Hyundai, like many other Korean exporters, enjoys advantages from a weak Korean currency. The won, which hit an 11-year low in March, has since gained by more than 30% of its value against the dollar but it is still about 20% weaker than it was at the end of 2007. The won is expected to strengthen further over the next year but Hyundai execs express confidence that their company could keep growing in 2010 with a new lineup of cars, including the newly designed Tucson crossover and Sonata family sedan. If things pan out as Hyundai envisages, its group sales, including those of Kia brand, could soon zoom past Renault-Nissan’s. That will make Hyundai one of the industry’s top five major players.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.