South Korea's leading automaker Hyundai Motor said Thursday it suffered a sharp drop in profit last year due to strikes and the won's rise against the dollar. Net profit plunged 34 percent to 1.53 trillion won (1.63 billion dollars).
Operating profit fell 11 percent to 1.23 trillion with sales slipping 0.2 percent to 27.34 trillion won. "The won's strength was the biggest factor that undercut our profit last year, along with strikes that have delayed car shipments," a Hyundai Motor spokesman told AFP.
A stronger won made cars more expensive for foreign buyers and eroded the value of earnings abroad when converted into the South Korean currency. In the fourth quarter alone, Hyundai Motor's operating profit dropped 8.6 percent from a year earlier to 306.7 billion won, well below market expectations of 370 billion won. Its fourth quarter net profit tumbled 22 percent earlier to 537 billion won, with sales down 6.6 percent year-on-year to 7.58 trillion won.
The figures for operating profit and sales do not include Hyundai's overseas plants, which posted a rise of 32 percent to 9.9 trillion won. The net profit figure does include these foreign operations. The company said it will boost its operating profit margin by selling more upmarket vehicles.
Hyundai hopes to sell 1.71 million vehicles compared to 1.61 million last year, with the target for domestic sales set at 630,000 and exports at 1.08 million, up 5.3 percent. "Due to a slowdown in our economy, domestic sales will remain sluggish. However, we will introduce new models to enlarge our market share," the company said in a statement.
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