Hyundai Reports Lowest Profit in 5 Years

South Korean carmaker Hyundai has posted its lowest annual global profit in 5 years for 2015 due to the country's strong currency and slowing sales in the key Chinese market. The firm's net profit has fallen for 3 straight years since 2013 as a strong won, along with a weakening yen, blunted its price competitiveness against Japanese rivals in global markets.

In India, however, Hyundai is likely to post very healthy sales figures, with the carmaker having reportedly sold around 4.76 lakh vehicles in 2015. This figure is 11,000 units more than the 4.65 lakh target set for India. It is also poised to meet its export target of 1.67 lakh units, which means the company would have used 98 per cent of its capacity, the highest among Indian carmakers.

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According to a statement from Hyundai, global net profit for 2015 amounted to 6.5 trillion won ($5.4 billion), down 15 per cent from a year ago and the lowest since 2010. Operating profit also sagged to 6.35 trillion won, down 16 per cent from a year earlier and the lowest since 2010.

The won weakened slightly towards the end of the year, but the impact was offset by dramatic falls in the Russian and Brazilian currencies that hit Hyundai's sales there, chief financial officer Lee Won-Hee said.

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Sales in the 2 major emerging markets are expected to shrink this year, Lee said, as well as in China which accounts for about 20 per cent of the firm's entire sales. "We can no longer expect the Chinese auto market to grow by double digits like before," Lee said.

Hyundai sales in China - the world's largest market for automobiles - fell 7 per cent last year to 1.03 million units.

The company sold a total of 4.96 million vehicles in 2015, short of its initial target of 5.05 million, Lee said, predicting overall sales of 5.01 million units in 2016.

The company plans to beef up sales of sports utility vehicles, popular in many emerging markets, and high-end luxury sedans.

In November, Hyundai launched a high-end brand named after its Genesis sedan in a bid to shed its image as a cheaper alternative to bigger rivals like Toyota.

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Hyundai, along with its smaller affiliate Kia, forms the world's fifth-largest automobile manufacturing group.

(With inputs from AFP)