South Korean automaker Hyundai Motor reported Thursday a profit of 2.45 trillion won ($2.2 billion) in the first quarter, which is up 31 percent compared to the same period a year ago.
The profit rise was mainly due to 15 percent rise in the sales of Accent and Elantra models in the US and 13 percent rise in sales of the i30 compact in Europe. The company has forecast that sales will rise 5.7 percent to 4.3 million units this year.
The faster-than-expected economic recovery in the US is benefiting Hyundai, while expectations from the European market are not so high due to the debt crisis that continues to loom over the eurozone.
In China, despite the reduced pace of economic growth, there sales rose 6.8 percent rise in the first quarter. The delivery of Accent sedan models climbed 80 percent in the first quarter in China, the world’s largest automobile market. Hyundai's third plant in China will start production in July as the company aims to increase capacity to 1 million units.
Hyundai also plans to start production in a new plant in Brazil this year as part of its growth strategy in emerging markets. The Brazilian plant will help it compete more aggressively with Volkswagen and General Motors in South America. Hyundai is expecting Brazil to become the world’s third largest auto market by 2015.
Continue Reading Below
Last year Hyundai, the world's fifth biggest automaker, started a production plant in Russia, with a capacity of 150,000 units.
Meanwhile, Hyundai could face stiffer competition from its Japanese competitors this year if the yen weakens on the back of further monetary easing.