Hyundai Motor 2006 Q2 Profit Drops on Weaker Korean Sales

SEOUL August 7, 2006; Reuters reported that Hyundai Motor Co., South Korea's top auto maker, posted a 37 percent fall in quarterly profit on Monday, pressured by weaker domestic sales, a strong won currency and high raw material costs.

Hyundai, the world's No.6 auto maker by sales volume along with its affiliate Kia Motors Corp., earned 387.3 billion won ($401.6 million) in April-June net profit, compared to 613.2 billion won a year earlier, missing a 496 billion won profit forecast from 12 analysts polled by Reuters.

The second-half outlook for Hyundai, which controls half the country's car market, is strained by a month-long strike by its labor union that cost 1.3 trillion won in lost output, and depressed local consumer sentiment amid higher oil prices and interest rates, though some analysts see better sales of high-end models.

Shares in Hyundai fell 1.3 percent in April-June, while the broader KOSPI market dropped 4.7 percent. Kia fell 18.5 percent.

Kia is due to release its quarterly results later on Monday.