Monday, February 28, 2011

Hyundai-Kia Trails in Operating Profit as Global Rivals Recover

Volkswagen posted the largest operating profit among global automakers in 2010, while Hyundai-Kia Automotive Group slipped from the No. 1 spot in 2009 to seventh.

Even with a record operating profit last year, the Korean automaker was also outperformed by Toyota, Honda and Nissan despite the strong yen and a series of recalls suffered by the Japanese giants. With its rivals rebounding from the global financial crisis, Hyundai-Kia may see the brakes put on its growth this year and onward.

Volkswagen on Friday announced an operating profit of 7.1 billion euros (US$9.8 billion) for 2010. Ford took second place with US$7.58 billion, followed by Honda.

GM ranked sixth with $5.7 billion, recording its first surplus in six years and less than two years after it filed for bankruptcy protection. Hyundai-Kia's operating profit rose 46 percent on-year to a record W4.9 trillion (US$1=W1,127), but it trailed GM in the world ranking.

Volkswagen and GM's strong results last year were due to their advances in China, the world's largest car market. Industry observers say GM has sharpened its global competitiveness by relying more on its Korean production facilities. The Japanese manufacturers' growth is attributable to painstaking efforts to reduce inventory rates and increase productivity.

However, Hyundai-Kia's operating profit did not include that of its overseas units, and half of it was generated in the domestic market. In contrast, Volkswagen and Japanese carmakers performed poorly on their home soil while overseas sales boosted their overall revenues.

An analyst at KB Investment and Securities forecast that global automakers’ profitability will continue to improve and Hyundai-Kia will face fiercer competition from foreign rivals.
Link : http://english.chosun.com/site/data/html_dir/2011/02/28/2011022801226.html

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