Hyundai Motor 2Q profit rises 37 percent

[July 28, 2011]  SEOUL, South Korea (AP) -- Hyundai Motor's net profit rose 37 percent in the second quarter amid record global vehicle sales, disrupted auto production in Japan and the popularity of new models in the South Korean market.

Hyundai, South Korea's largest automaker, earned 2.31 trillion won ($2.2 billion) in the three months ended June 30, according to a regulatory filing Thursday. It earned 1.68 trillion won the same period last year.

Sales revenue rose 19 percent to 20.1 trillion won from 16.9 trillion won a year earlier.

Hyundai Motor Co. sold 1.04 million vehicles worldwide during the second quarter, which company spokesman Ian Lim said was an all-time high. It was also the first time the automaker has sold more than 1 million vehicles in a quarter.

Vehicle sales in the first six months of the year increased 11 percent to 1.96 million.

The second-quarter profit was the latest impressive earnings for Hyundai, which has benefited from its overseas factories and sales operations and raised its brand image globally.

The company has pursued an aggressive overseas expansion and has plants in China, India, the United States, the Czech Republic, Turkey and Russia. It is building one in Brazil.

The Hyundai Motor Group, which includes South Korea's Kia Motors Corp., is the world's fifth-largest automotive group.

"It's a new milestone and it will stay at that sort of level in the second half," Greg Kim, an auto analyst at Mirae Asset Securities in Seoul, said of Hyundai's quarterly vehicle sales performance.

Hyundai is benefiting from factors such as the popularity of new cars, strong sales overseas and in the profitable South Korean market and less need for spending on incentives to entice buyers and lower production costs, Kim said.

He said Hyundai gained some market share as a result of disrupted auto production in Japan following the earthquake and tsunami disaster in March. But it would have been a strong quarter even without that factor, he said.

"The product mix is getting better toward higher-end vehicles with high profit margins such as the Sonata and the Grandeur," he said.

Shares in Hyundai Motor, which released earnings results about one hour before the stock market closed, fell 1.7 percent to finish at 239,000 won. The company's share price has risen 38 percent so far this year.

[Associated Press; By KELLY OLSEN]

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