By on April 22, 2010

Building on solid financial results in the fourth quarter of last year, Hyundai has announced today that it turned a net profit of about $1.02b (as in billion) in Q1 2010. That shatters a previous record of $650m, recorded in the second quarter of last year, and eclipses last year’s $203m Q1 net profit. According to the Detroit News, Hyundai raised sales revenue by nearly 40 percent last quarter, with global gross receipts hitting $7.6b. Sales volume was up 36.6 percent, to 842,037 units. Though the Chinese and Indian markets drove growth with 48 and 34 percent volume increases respectively, the big news comes from the US, where Hyundai’s volume grew 78.3 percent and revenue gained 61.5 percent. And if Hyundai’s margins seem surprisingly attractive, consider that the dollar’s recent declines against the Korean Won bled off some of that US-market profit. Oh, and that billion-dollar profit doesn’t include results from Hyundai’s sister-firm Kia, which reports Q1 financials tomorrow. Get down with your bad self, Hyundai!

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13 Comments on “Hyundai Nets Over $1b, Breaks Quarterly Profit Record Again...”

  • avatar

    So how come the Big 3 couldn’t make good margins from fleet sales?

    Hyundai seems to be making out like a bandit with all those increased sales.

    • 0 avatar

      @SkiDMark or @SkiD4Satan

      Your statement has no validity. The fleet sales isn’t a method of increase margin per car. Generally, it is a device to off load excess inventory in lieu of not producing cars. Making 0 or making slight loss is better than making the loss by not producing cars, a classic Economics 1301 principle. If fleet sale was that good, why would companies even bother to sell their car directly to the consumers through their retail channels.

      Following your logic, all companies should sell their cars to fleet since “…make good margins from fleet sales”

      During the 3rd quarter of this accounting year, Chrysler sold nearly 50% of its cars to fleet. How is Chrysler doing?

      Average fleet sales is around 19% but recently has increased to 25% industry wide. @900,000 vehicle sale per month, that’s roughly ~ 225,000. As for Hyundai, if the ratio is kept same just for this context, Hyundai would have sold 11,750 vehicle on March for the fleet sale. Such figure doesn’t push the profit margin way above their previous level. Other facts contributed to Hyundai’s profit changes.

      Your statement discounts their efforts in other areas as if Hyundai has been doing nothing but making fleet sales. Apparently, Hyundai didn’t advertise, bringing out newer designs, bringing out new engines, ect…

      In fact, with your logic, all the non-US car companies have to do is to sell their cars to fleets “to be making out like a bandit with all those increased sales” Because apparently, such practice is “a bandit.”

    • 0 avatar

      His argument isn’t just flat out invalid. It’s based on misinformation and misperception.

      Check out the recent incentives on their statistics. After the 2010 Sonata, they’ve been becoming really stingy with incentives. That’s just 1 example. Another article posted recently showed they were cutting back on cashback and other discounts. Hyundai America’s prez was even quoted by Reuters as stating they were weaning their brand off of price cutting.

      Translation: They’re shoring up on their resale value.

      Also if you visit a rental lot, you’ll most likely see some Accents and Elantras. In a few months, if you’re lucky, you MAY see the 2011. But you’ll have to ask for it and it’ll probably be available as a way for Hyundai to market it to them as a competent competitor to Camry and Accord. Hyundai’s really protecting the resale value on their crown jewel. I don’t have raw numbers to prove it. But judging from the way their Tucson and Sonatas keep rising, I don’t think they’ll be depending on fleet sales as much as they used to. The last quoted figure from years ago was about 30% which made sense considering that was when Hyundai was trying to reach out to a new customer base. Not so much now. If they’re intent on raising resale value, they’ll for sure be limiting the presence of Sonatas and Tucsons at rental companies.

    • 0 avatar

      Ah, fleet sales. The last bastion of hope for Korea bashers since Jay Leno started avoiding them at cocktail parties.

    • 0 avatar

      Uhh, for the month of February, Toyota led everyone in fleet sales (followed by Ford).

      Hyundai has cut back sharply on fleet sales for the Sonata and Tucson (while the Fusion outsold the Sonata in total sales, the Sonata had higher retail sales in March).

      And as already stated, Hyundai has drastically cut back on incentives and for the past several months have put less $$ on the hood than Toyota (Hyundai also has had significantly less in incentives than Nissan for quite some time).

      Btw, Kia did about $360 million in net profit for the 1st Q – so together, H&K had more than twice the 1st Q net profit than the VW Group, the largest automaker.

  • avatar

    Man, I wish I could invest in this company. I’ve been saying for several years that Hyundai is going to climb it’s way among the big 5.

    • 0 avatar

      My investment has been to recently buy an 01 Elantra and an 09 Sedona. Both are really nice cars for their purpose.

    • 0 avatar

      Man, I wish I could invest in this company.

      You can. But the time to buy Hyundai was a year ago, before everyone wanted it and it cost only 1/3 the price. Right now it probably makes more sense to look at Toyota, whose shares have been beaten up by all the negative hype.

  • avatar

    GM & C have to be speechless. H/K has the best warranty, high quality, attractive pricing, great advertising, and many good-looking vehicles.

    And not a pickup truck or a hybrid among them.

    • 0 avatar

      It should be “GM uh? C”. It’s bit intriguing that the GMAC was the financial out-source for the GM & Chrysler. Maybe, GMAC’s name was the precursor for the GM and Chrysler going bust. Two of the worst car companies in USA.

    • 0 avatar

      Well, they are releasing the Hyundai Sonata hybrid, but I’m guessing they’ll sell those in lower volume initially. Their hybrid powertrain from what I hear is their very own and operates differently from the Prius.’ I’ll definitely be checking TTAC for more reviews on it.

  • avatar
    John R

    Woot. Time to celebrate. Get a license to sell the Spirra over here:

  • avatar

    Ed, et al,

    Maybe it’s time to include the Hyundai ticker in the Yahoo finance box? They certainly are a force in the American automobile industry.

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