Hyundai Motor's 2Q profit dips due to strong South Korean won

SEOUL, South Korea – Hyundai Motor Co. said Thursday its second quarter profit fell 7 per cent as the appreciation of the South Korean won diluted its overseas earnings, offsetting a sales perk from upgrades to its Genesis luxury sedan and the Sonata family car.

The South Korean automaker earned 2.3 trillion won ($2.2 billion) for the April-June period, compared with 2.5 trillion won a year earlier. The result was in line with expectations.

Operating income dropped 13 per cent to 2.1 trillion won while sales declined 2 per cent to 22.8 trillion won.

It sold 2.5 million vehicles during the first six months of this year, up 4 per cent from the previous year.

Despite selling more cars, Hyundai said its bottom line was hit by the sharp rise of the South Korean won. Hyundai said the won rose 5 per cent during the first six months compared with a year earlier.

The company upgraded its Genesis luxury sedan at the end of last year and Sonata passenger car this year. Those two models have been popular in South Korea, helping Hyundai win back some ground after taking a hit last year from greater available of foreign cars.

Hyundai said competition from imported vehicles in South Korea would intensify as tariffs on European brands were completely removed as of July, a result of a free trade deal between the European Union and South Korea.

The maker of Elantra sedan said continuing strength in the South Korean currency, a slowdown in China’s growth and slower-than-expected recoveries in Europe and other developed countries add to the uncertainty for the automaker.