Hyundai Motor Reports 2012 Third Quarter Earnings

SEOUL, SOUTH KOREA – Oct 29, 2012: Hyundai Motor Company, South Korea’s largest automaker, sold 3,183,516 units (domestic: 481,403 / overseas: 2,702,113) worldwide in the first nine months of this year, up +7.9 percent compared to the same period last year.

Net profit increased +17.4 percent to 7.16 trillion won for the first three quarters of 2012, while operating profit rose +14.8 percent to 9.07 trillion won. Improved product mix and sales growth boosted sales revenue by +7.8 percent to 61.75 trillion won (auto: 52.55 trillion / finance and others: 9.20 trillion). Strong overseas sales made up for softening demand in the Korean market, resulting in the overall year on year increase. Enhanced brand value and increased average selling price drove profit margin growth.

During the third quarter only, Hyundai sold 1,000,748 units, posting sales revenue of 19.65 trillion won (auto: 16.23 trillion, finance and others: 3.42 trillion) and operating profit of 2.10 trillion won with operating margin of 10.5 percent. Compared to the second quarter, however, sales revenue dropped -10.5 percent, and operating margin decreased by -0.9 percent. Continued weak demand in the Korean domestic market, and production shortfall caused by labour strikes contributed to halting the upward momentum of quarterly sales.

Hyundai sold a total of 3,183,516 units worldwide through September, up +7.9 percent from last year’s 2,949,905 units. While domestic sales decreased by -5.6 percent to 481,403, Hyundai sold 2,702,113 units outside its domestic market (export: 902,304, overseas plants: 1,799,809), up +10.8 percent compared to the same period last year.

Hyundai forecasts continued business uncertainties in the auto industry for the fourth quarter, however remains confident it will achieve its sales target through differentiated marketing programmes, improved dealer networks and ongoing delivery of quality products.

The European auto market is expected to shrink by approximately -8.0 percent, despite the various measures taken to turn the slumping economy around, the downward trend continues to persist. In spite of economic indexes signalling improvement, the U.S. market is not expected to make a significant recovery. Competition among major automakers stands to increase due to slowing demands from emerging markets such as China and India, once considered major drivers of the auto industry.

Hyundai Motor Company aims to turn these challenges into opportunities by improving company fundamentals and strengthening competency by pursuing qualitative growth based on quality management.

To do so, Hyundai will focus on launching strategic models for the local market and reinforcing dealer networks of its overseas sales subsidiaries in Europe. In the U.S., it will carry out aggressive local marketing activities to increase market share.

Hyundai will be looking to stabilise operations at its third plant in China and its newest plant in Brazil, both of which commenced production this year, to secure a competitive position in the emerging markets. To proactively respond to changing global demands, Hyundai also plans to develop and sell more fuel-efficient and eco-friendly models.

Hyundai Motor will continuously strive for qualitative growth, focusing on increasing profit margin rather than expansion.