Hyundai Profits Up. Honda's Down.
Korean automaker gaining worldwide in popularity. Honda and Toyota suffering effects of Earthquake and Tsunami.
Hyundai's fortunes are rising worldwide. It's sales volume -- the number of vehicles it sold -- was up 9% to 922,000. Much of that increase occurred in plants in the U.S. and China, where output climbed by 14 percent. Hyundai is also benefiting from selling higher-priced vehicles to its customers, a result of greater consumer confidence in the brand as it has posted consistently higher quality scores. Prices for Hyundai branded vehicles are 2.5% higher in Korea, but 14% higher in other markets.
At this week's New York Auto Show, Hyundai introduced a new Accent sub-compact that got rave reviews from journalists attending the show. That car is the fourth Hyundai has introduced in the last year or so that gets highway fuel economy above 40 mpg, positioning the company well to take advantage of demand for thriftier vehicles as gas prices head toward $5.00 per gallon.
The story was very different for Honda Motor Co. in its earnings report. The Japanese automaker's profits were hammered by the effects of the Earthquake and tsunami in its own home country. Honda's earnings were down 38% in its fiscal fourth quarter in large part because its production of cars and SUVs is way down because of damaged plants and a shortage of parts.
The automaker said net income fell to 44.5 billion yen ($545 million) for the fiscal fourth quarter that ended March 31, lower than the 93.8 billion yen average of analysts' estimates compiled by news service Bloomberg. Sales fell 2.9 percent to 2.2 trillion yen.
Honda and other Japanese car makers are trying to restore full production operations after last month's earthquake and tsunami damaged parts factories and power plants, causing shortages of parts and and electricity to run even plants that were spared the devastation
Honda said it expects its global output to return to normal levels by the end of the year. But in the meantime, availability of many models will be short at Honda dealerships.
Toyota also estimates production of vehicles will remain below normal levels until November or December. The company may lose output of 300,000 vehicles in Japan and 100,000 overseas through the end of April due to quake-related shutdowns.
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