South Korea’s largest automaker Hyundai Motor Co. fared better than expected in the second quarter on domestic sales led by luxury Genesis sedans and sales tax incentive, but faced tough challenge on the global front.

According to the company earnings report on Tuesday, Hyundai Motor’s net profit in the second quarter dropped 1.5 percent on year to 1.76 trillion won ($1.55 billion).

Operating profit rose 0.6 percent to 1.76 trillion won from a year ago, beating market expectations for a drop of about 4 percent amid falling shipment and increased marketing cost from release of new sports utility vehicle and Genesis models.

Sales reached 24.68 trillion for the April-June period, up 8.1 percent from the same period. The automaker shipped 1,285,860 units in the April - June period, 4.3 percent more than a year ago. Domestic sales picked up in the quarter - up 18 percent against the first quarter - as drivers made purchases before the sales tax benefit ends in June.

For the full first half, the company sold 350,006 units at home - up 4.4 percent on year, but its overseas sales were down 1.8 percent to 2,043,235 units.

The first half net income slid 6.4 percent to 3.53 trillion won on year. Operating profit slipped 7 percent to 3.1 trillion won from a year ago. Sales rose 7.5 percent to 47.03 trillion won. It shipped a combined 2,393,241 units in the first six months this year.

The second-half outlook for the carmaker is also not so bright. Demand in emerging economies remains sluggish and uncertainties on the global front escalated after the British vote to leave the European Union.

Another setback is the labor union’s militant action including walkout to demand higher salaries.

The carmaker hopes release of clean emission and eco-friendly car models along with its high-end SUV and Genesis lineup could compensate for potential losses in the second half.

Hyundai Motor plans to pay out interim dividends to shareholders for 1,000 won per share. Total interim payout worth 268.7 billion won will go to shareholders within the next 20 days.

By Chun Beom-joo

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]