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Suffering from weak demand and high costs, Hyundai reported its lowest quarterly income in several years.
The automaker suffered a 39-percent drop in income during the fourth quarter of 2016. In that time period, car sales in its home country of South Korea declined 6 percent while sales in the U.S. dropped a whopping 14 percent. Just recently, Hyundai Motor America fired CEO Dave Zuchowski, reportedly for failing to meet sales targets.
For the full year, net income was down 12 percent. Meanwhile, Hyundai’s global sales declined 2.1 percent last year to 4.86 million units sold.
Hyundai said a labor strike during the middle of the year, as well as sluggish economies in emerging markets, hurt its bottom line. The automaker expects the business environment to remain difficult in the future due to a sluggish global economy and the possibility of stricter trade policies.
Hyundai has built its reputation on affordable small cars, and its decision to put crossovers on the back-burner is starting to reap consequences for the automaker. Although Hyundai says its yearly revenue was aided by increased sales of SUVs, Hyundai has plenty of gaps in its crossover lineup that it needs to fill if it wants to compete against the top automakers. As of now, it fails to offer subcompact and full-size options. To improve its prospects in the future, Hyundai says it will expand its lineup of SUVs, Genesis models, and eco-friendly technologies.
Source: Hyundai, The Washington Post
The post Hyundai Profits Down 39 Percent Last Quarter Due to Slow Sales appeared first on Motor Trend.
via Motor Trend January 25, 2017 at 07:31AM