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Hyundai Motor unfazed by weakening yen
Publication Date : 25-01-2013
Hyundai Motor said Thursday it sees no immediate threat from the weakening Japanese yen, but pledged to toughen its readiness against its Japanese and global rivals as they are expected to ramp up their offensive amid an overall slowdown in car sales this year.
“Because we have continued expanding overseas production, the risk from volatile foreign exchange rates has been largely reduced,” said Lee Won-hee, executive vice president and chief financial officer, during an earnings conference call at the company’s headquarters in southern Seoul.
The Hyundai CFO said the business impact from the weakening Japanese yen, in particular, would be limited as Japanese carmakers have also moved their factories abroad for the same reason.
“We still expect fiercer competition with Japanese rivals in some markets such as Australia and Russia. We also plan to step up our preparedness against their enhanced offensive on our home turf (Korea),” he said.
According to the day’s earnings release, Hyundai’s annual profit increased 5.1 per cent last year to 8.43 trillion won (US$7.88 billion) on strong sales in overseas markets, especially those of their pricier models with higher margins.
The Korean auto giant sold 4.41 million cars, including 667,496 in Korea and 3.74 million globally, and logged 84.4 trillion won in sales.
When combining the car sales of its affiliate Kia Motors, Hyundai Motor Group was the fifth-largest carmaker last year, behind Toyota, General Motors, Volkswagen and Renault-Nissan Alliance, according to recent industry data.
Even though Hyundai has continued to set new profit records for four consecutive years, its growth pace slowed last year as some negative factors, including volatile foreign exchange rates, affected its car sales in the fourth quarter, the company said.
The carmaker predicted that the global automotive industry would face sluggish car sales in both advanced and emerging markets, expecting a moderate 3 per cent growth in demand for new cars.
The company also said global competition would get fiercer this year as each government may come up with new measures to protect their home-grown carmakers.
In Korea, Hyundai is sure to face heightened competition with import brands that have been gaining ground rapidly in recent years and biting into Hyundai and Kia’s market dominance of 80 per cent of Korean car sales.
“We failed to give a prompt response to the popularity of compact vehicles with an engine capacity of less than 2,000 cc, especially diesel models. We will diversify lineups to strengthen competitiveness in the domestic market,” Lee said.
Hyundai said the company aims to sell 4.66 million vehicles globally, with its management emphasis being freshly put on product and service quality and upgrading its brand image.