Hyundai Motor Co <005380.KS>, South Korea's top automaker, warned global car demand will likely ease in the second half due to a slowdown in key markets such as China, Europe and the United States, sending its shares lower.
Hyundai, the world's No.5 car maker with affiliate Kia Motors Corp <000270.KS>, beat forecasts with a record quarterly profit, helped by strong sales of models such as the Sonata sedan and Santa Fe sports utility, as well as weakness in the Korean won.
Analysts said new model launches would help in Hyundai's domestic Korean market but would struggle to overcome the cloudy economic outlook.
The launch of new models will only have a limited effect in the short term, and we cannot see it as a solution for worsening demand. Jung Sangjin, an asset manager at Dongbu Securities in Seoul.
Hyundai's competitiveness in the international market will depend on the strength of the won against major currencies.
Shares of Hyundai fell over 2 percent at one point and were down 0.6 percent at 0610 GMT, underperforming the broad market's <.KS11> 0.3 percent drop. Since the beginning of the year, Hyundai shares have risen about 20 percent, versus a 5 percent gain in the wider market.
After a series of bullish earnings, market focus now is whether the second quarter might have been the peak, said Oh Hyun-Seok, a market analyst at Samsung Securities.
Market players are taking a short-term position on the stock and that's why Hyundai shares barely moved to the strong results.
China, which surpassed the United States to become the world's top auto market last year, is facing a slowing economy and industry sales growth is falling.
In the second quarter, Hyundai's volume sales to China rose 17.4 percent from a year earlier, while domestic volume sales fell 17.5 percent during the same period, the company said.
Hyundai's U.S. volume sales jumped 32.6 percent during the April-June and its market share rose to a record 5.2 percent in June, despite sharply reduced incentives given to customers in the country.
Global car sales in the second half are seen slowing slightly from the first half due to fiscal crises in some European countries, the end of governments' incentives on new car purchases and higher interest rates, Executive Vice President Lee Won-hee told investors.
Hyundai reported a record net profit of 1.39 trillion won ($1.17 billion) in the second quarter, compared with a consensus estimate of 1.1 trillion won by 23 analysts on Thomson Reuters I/B/E/S.
That was up 71 percent from 811.9 billion won profit a year earlier and higher than the previous record of 1.13 trillion won in the first quarter of 2010.
Quarterly operating profit was a record 863.3 billion won, above a forecast of 801.3 billion won profit.
(Additional reporting by Miyoung Kim and Suh Kyung-min; Writing by Lee Chyen Yee; Editing by Jonathan Hopfner and Lincoln Feast)