Hyundai India profit up 6% in 2017 to Rs 22 bn, growth similar to Maruti's

Korean car maker Hyundai, the second-biggest player in the domestic car market, expanded its profit by six per cent in the 2017 calendar year (CY) to Rs 22 billion. The profit increase is identical to market leader Maruti Suzuki's, which saw a five per cent increase in profit for the year ended March 31, 2018. Hyundai’s sales revenue also grew by six per cent in 2017.

Hyundai Motor India (HMI), a subsidiary of Hyundai, is not listed in India and its annual financial results are declared to the registrar of companies with a time lag. But the information available with the parent company shows that HMI’s net profit increased almost six per cent to 349,862 million Korean won in CY2017 from 330,280 million won in CY2016. In Rupee terms the 2017 profit translates to almost Rs 22 billion.

The car maker’s sales revenue in India increased six per cent to 6,346,672 million won. The CY2017 revenue translates to Rs 398 billion in Rupees. HMI sold record 678,221 vehicles in the year ended December 31, 2017, growing 2.44 per cent over the previous calendar year. Of this, domestic sales were 527,320 units with a growth of 5.4 per cent YoY. Exports, however, at the country’s second biggest car exporting company, had declined 6.57 per cent to 150,901 units. American car maker Ford recently replaced Hyundai as the biggest exporter of cars from India.At a consolidated level, Hyundai globally posted a decline of over 20 per cent in profit during CY2017 to 4,546 billion won even as sales revenue grew by three per cent to 96,376 billion won. Its Indian arm is one of the steady performers and has posted growth in volume, sales and profits year after year. In CY2017, the Indian arm accounted for 7.7 per cent of global profit compared to 5.7 per cent in the previous year. Share in global revenue stood at 6.6 per cent in CY2017.

Hyundai India managing director and chief executive officer Y K Koo said early this year that the company aims to produce 713,000 vehicles in 2018 through improvement inefficiencies, which will also expand the capacity utilisation to a new high of 99 per cent at its Chennai plant. “We will still have an option to take the total production further to 763,000 vehicles during 2019 without any expansion,” he said.

On exports, Koo had said many Asian markets are seeing a shift in trend towards import of CKD cars instead of completely built units (CBUs) owing to tax structures. Accordingly, thousands of cars that currently go as CBUs will be going in the form of CKD units, allowing Hyundai to have a leeway to expand production. The company is therefore in no hurry to set up a new manufacturing unit in India.