Hyundai announce a fall in first quarter profits.
Hyundai has announced a 15% drop in the first quarter of the year
South Korea's largest automaker, Hyundai Motors has announced a 15% drop in the first quarter of 2013. For the three months to March, net profit came in at 2.1 trillion Korean won (£1.2bn), compared with 2.5 trillion in the same period a year ago.
Hyundai, which is currently on the news for its controversial advert claims that the drop in sales is a result of industrial action in South Korea, the strong standing of the Korean Won against the United States Dollar and poor demand from the European market. South Korea’s automobile sector has experienced a number of large scale industrial action over the previous six months.
It is currently on its seventh straight weekend of industrial action and industry experts claim that this has resulted in the production loss of 50,000 vehicles, costing Hyundai nearly 1 trillion Won. Asian automakers, in particular those from Japan, as well as Hyundai depend on weak standings off their individual currencies against the US Dollar.
Hyundai and all Asian automakers depend on overseas sales
All Asian automakers depend on their overseas sales and often are significantly affected when they attempt to bring their profits back into their home countries because of the exchange rates. Honda has recently reported an increase in 2012 annual profits as a result of a weak standing of the Japanese Yen against the US dollar.
This is as result of aggressive monetary policies by the Japanese government. It is not known whether the South Korean government will take on similar policies. The strong Won has also made Hyundai's vehicles less price competitive when compared to their Japanese rivals. The Yen has depreciated by more than 10% since January giving a boost to Japanese car makers.