Hyundai Motors Posts 2004 Operating Profit Per Unit Numbers
According to Chosun Ilbo, South Korean carmaker Hyundai Motor posted bigger operating profit per unit than GM, Ford and Chrysler in 2004.
Hyundai Motor sold 1.67 million cars and earned $1.98 billion in operating profit last year, which earned a per-unit operating profit higher than the U.S. carmakers. U.S. automakers' lower profits are due to fierce price wars in the American market (with lots of rebates!).
Operating profit is a company's earning power from ongoing operations, excluding profits from selling property and interest. For carmakers, operating profit per unit is a measure of profitability.
Essentially, in 2004, Hyundai raised its per-unit operating profit due to higher car prices. This is, in turn, was the result of better quality cars.
Nevertheless, Hyundai’s operating profit per unit is still lower than high-end carmakers like BMW, Mercedes Benz, and Audi, which produce high added value models.
Korea's other carmakers Kia and Ssangyong recorded a lower per-unit operating profit than their U.S. rivals since they both offer discounted prices.
Hyundai Securities analyst Song Sang-hun said carmakers with a low brand image in overseas markets cannot easily hike prices even if they produce high-quality cars. He said Korean automakers should therefore develop high-added value models and boost their brand image to raise profitability per unit.
Hyundai Motor sold 1.67 million cars and earned $1.98 billion in operating profit last year, which earned a per-unit operating profit higher than the U.S. carmakers. U.S. automakers' lower profits are due to fierce price wars in the American market (with lots of rebates!).
Operating profit is a company's earning power from ongoing operations, excluding profits from selling property and interest. For carmakers, operating profit per unit is a measure of profitability.
Essentially, in 2004, Hyundai raised its per-unit operating profit due to higher car prices. This is, in turn, was the result of better quality cars.
Nevertheless, Hyundai’s operating profit per unit is still lower than high-end carmakers like BMW, Mercedes Benz, and Audi, which produce high added value models.
Korea's other carmakers Kia and Ssangyong recorded a lower per-unit operating profit than their U.S. rivals since they both offer discounted prices.
Hyundai Securities analyst Song Sang-hun said carmakers with a low brand image in overseas markets cannot easily hike prices even if they produce high-quality cars. He said Korean automakers should therefore develop high-added value models and boost their brand image to raise profitability per unit.
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