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Hyundai Sales Surpass Honda

April 29, 2011
3 min to read


Hyundai Motor Co., South Korea's largest carmaker, boosted quarterly profit 46 percent as it won sales from Japanese rivals, outpacing Honda Motor Co., whose production was cut by last month's record earthquake in Japan.


Hyundai increased net income to 1.88 trillion won ($1.75 billion) in the three months ended March 31 from a revised 1.28 trillion won a year earlier, the Seoul-based company said in a regulatory filing Thursday. The stock jumped 7.3 percent to the highest closing price since it began trading in 1975, reported The Detroit News.

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"Chaos brings disorder, and that's when you see changes in ranks among leaders," said Lim Jeong Seok, head of equity at KDB Asset Management Co., which oversees the equivalent of $2 billion in Seoul. "The past financial crisis and the recent earthquake may be an opportunity for Hyundai to pass bigger rivals."


Hyundai increased global vehicle sales about 9 percent last quarter from a year earlier after adding new models including the Grandeur premium sedan in South Korea and the Accent small car in China.


The carmaker might extend sales gains as Toyota Motor Corp., Nissan Motor Co. and Honda curtail production after the March 11 earthquake.


Honda, Japan's third-largest carmaker, reported fourth-quarter profit that missed analysts' estimates. The Tokyo-based automaker's net income plunged 38 percent to 44.5 billion yen ($545 million) for the three months that ended March 31. Revenue fell 2.9 percent, while Hyundai's gained 21 percent in the same period.


Hyundai boosted vehicle sales in the January-March period to 919,000, outselling Honda, whose global deliveries fell 1.6 percent to 860,000, according to the companies. A year earlier, Honda outsold Hyundai 874,000 to 842,000.

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Japanese carmakers are working to restore full operations after the magnitude-9 earthquake and tsunami damaged parts factories and power plants, causing shortages of components and electricity. Honda said earlier this week it expects its global output to return to normal levels by the end of the year.


"Even if production comes back, sales may not" in Japan, said Yuuki Sakurai, president of Fukoku Capital Management Inc. in Tokyo.


"May sales, June sales may be close to zero as the companies won't have much to sell."


Honda's sales drop in the fourth quarter was led by a 22 percent decline in Japan from a year earlier, when a government subsidy program for car purchases helped boost domestic sales. Deliveries rose 7.9 percent in North America to 356,000 vehicles and 0.4 percent in Asia, excluding Japan, to 238,000.


Honda's output in Japan plunged 63 percent from a year earlier to 34,754 vehicles in March, the carmaker said earlier this week.

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The company's output of cars and parts in Japan will remain at 50 percent of regular capacity until the end of June.


"We are in a situation where our supply is short when demand for cars is increasing globally," Managing Director Fumihiko Ike told reporters in Tokyo.


Honda declined to provide a full-year earnings forecast, citing the impact of the natural disaster on production.


The earthquake cost Honda 45.7 billion yen ($559 million) in the year ended March 31, the company said.

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