Hyundai Motor Spurts Ahead
New Models, Improved Reputation Boost Carmaker
By Jane Han
What a year for Hyundai Motor.
Launching upgraded models and opening new plants in emerging markets amid the global recession were no easy achievements, but the South Korean auto giant marched right through and rolled out record results.
Hyundai built up its momentum from the start of the year to eventually hit record quarterly profits.
In the third quarter, the world's No. 4 automaker, combined with its affiliate, Kia, posted a record quarterly net profit of 979.1 billion won, up 270 percent from a year earlier.
In the April-to-June period, it earned 811.9 billion won, which was also a strong gain from the previous year.
The better-than-expected results were racked up at a time when the world's top car makers were sinking in the industry's worst-ever downturn. So what was behind the earnings surprise?
Stimulus measures put out by governments around the world boosted demand and the weak currency helped lift sales. But besides these factors, analysts say Hyundai's cheap and fuel-efficient vehicles and lineup of new models largely helped win over consumers who were skittish to spend.
``Hyundai got a nice lift from its new models this year,'' said Sohn Myoung-woo, an analyst at Woori Investment & Securities, adding that the company's strong performance is likely to continue through the fourth quarter.
There are concerns that the Korean firm will see weaker results at the end of this year as the local currency strengthens and governments around the world phase out measures to boost auto demand, says Ko Tae-bong, analyst at IBK Securities.
But he said Hyundai will post higher quarterly results in the October-to-December period with a more diversified sales mix.
The strengthening Korean won, higher oil prices and interest rates are potential risks for Hyundai and many other local exporters, but the automaker says sound profitability will be maintained thanks to the fresh lineup of new models.
Hyundai's Tucson ix and Sonata YF and its affiliate Kia's Forte Koup are some of the top debuts by the auto group this year.
Most recently in September, Hyundai introduced the sixth-generation Sonata aimed at shaking up the world's mid-sized sedan market.
The company's perennial bestseller adopted an all-new design and a six-speed automatic transmission.
``The Sonata will set a new standard for world class mid-size sedans with its state-of-the-art technology, superior build quality and design,'' Chung Eui-sun, Hyundai's Vice Chairman said at the launching ceremony in Seoul.
It cost Hyundai 450 billion won and took four years to develop the new model from concept to completion.
Two months before the launch of the new Sonata, the car maker introduced the all-new Tucson ix.
The coup-style SUV features a completely redesigned exterior styling with a bold ix-onic concept shown at the Geneva Motor Show in March.
The next-generation Tucson is powered by a 2.0 liter engine, available in both diesel and gasoline, which pump out 184 horsepower and 166 horsepower, respectively.
Named after a city in the U.S. state of Arizona, the Tucson has been one of the most popular Hyundai models with more than 1 million sold worldwide since its debut in 2004.
Hyundai invested 280 billion won and three years to develop the new design.
Some of the design highlights include a vehicle dynamic control, which improves safety and stability by minimizing skids; an emergency stop signal, which automatically triggers the emergency hazard lights in the event of a panic stop; and downhill brake control and hill-start assist control, which allows the vehicle to maintain a safe speed on steep declines without having to use the brake.
Hyundai has its annual sales for the Tucson pegged at 16,000 in the Korean market this year and 40,000 annually starting next year. From the year 2011, the company predicts its sales will reach 300,000 globally, with 260,000 sold on overseas market.
Hyundai's affiliate Kia Motors also rolled out new models this year, including the 2010 Forte Koup.
The car maker's first-ever two-door coup embodies sporty features and capabilities that make it a fresh addition to the Forte family.
Available in two trim levels (EX and SX), the Forte Koup is slightly shorter in length and height than the Forte Sedan. However, the smaller body still allows comfortable seating for up to five passengers, according to Kia officials.
``The Forte Koup represents the next exciting step in the transformation of Kia design and offers a blend of sporty and emotional appeal,'' said Michael Sprague, Kia Motors America's vice president of marketing.