SEOUL: A strong local currency and slowing sales in the key Chinese market pummeled South Korea’s Hyundai Motor in 2015, with the automaker on Tuesday reporting its lowest annual profit in five years.
Hyundai, along with its smaller affiliate Kia, forms the world’s fifth-largest automaking group.
The firm’s net profit has fallen for three straight years since 2013 as a strong won, coupled with a weakening yen, blunted its price competitiveness against Japanese rivals in global markets.
Net profit for 2015 amounted to 6.5 trillion won ($5.4 billion), down 15 percent from a year ago and the lowest since 2010, according to a statement from Hyundai.
Operating profit also sagged to 6.35 trillion won, down 16 percent 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.
Sales in the two major emerging markets are expected to shrink this year, Lee said, as well as in China, which accounts for about 20 percent 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 auto market — fell seven percent 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, it 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.