Hyundai Passes Honda 1Q Global Sales - Great Cars And No Earthquake in Korea

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TOKYO/SEOUL April 28, 2011; Chang-Ran Kim and Hyunjoo Jin Chang-ran Kim And Hyunjoo Jin writing for Reuters reported that Top Asian car makers Honda Motor and Hyundai Motor painted vastly different portraits on Thursday, with Hyundai turning in a stellar quarterly performance while Honda struggled to overcome supply woes after Japan's devastating earthquake.

Japanese automakers have slashed production since the magnitude-9.0 earthquake on March 11 and have yet to determine when suppliers will fully recover, forcing them to delay issuing forecasts for the current year.

South Korea's Hyundai has been picking up the slack, helped by a popular line-up of new models which have been selling strongly in top markets China and the United States.

Its shares surged 7 percent to a record high after its results, taking gains for the year to date to 44 percent.

"Hyundai has been emerging as an alternative to Japanese cars, shaking off its image as a maker of cheap cars," said Lee Dong-jin, a fund manager at KTB Asset Management. "It's now seeing some benefits from increasing production at overseas plants while the world took a hit from the financial crisis."

Hyundai, ranked fifth by global sales in 2010 with its affiliate Kia Motors (000270.KS), said its net profit rose 47 percent to 1.88 trillion Korean won ($1.7 billion) in January-March, compared with 1.28 trillion won a year ago.

Honda, hurt by supply chain disruptions as a result of the catastrophes in Japan, said its net profit for the January-March quarter fell 38 percent to 44.55 billion yen ($541.8 million). Operating profit fell 52 percent to 46.21 billion yen, compared with an average estimate of 103.1 billion yen from 15 analysts.

Japan's No.3 automaker said it would not provide an outlook for the new business year until at least mid-May as it struggles to measure the speed of recovery in the industry's complex supply chain.

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