Ford, Hyundai Posts Profits
After a recent article about Tesla Motors turning a profit, I received a friendly e-mail from a regular reader that I was actually painting a false picture of the automotive landscape. This was of course the last thing I wanted to do. The reader wrote that I wasn't highlighting a couple of bright spots in the auto-field, mainly Ford and Hyundai. I knew of both of these companies' situation but was focusing on Tesla, the only all-electric car company with such profits, in the article. In the pursuit of being fair and balanced, I want to present the recent news on these two automakers, too.
First, Ford, an American automaker, posted a quarterly profit of $2.3 billion. This impressive profit was mainly due to onetime gains resulting from debt restructuring this past spring. The automaker did improve its American market share by 2 percentage point. The company only one of the big three that did not need any type of bailout fundings is banking on hybrid and improved gas efficiency to keep this streak of profit alive. Ford will improve fuel efficiency in all vehicles approximately 20 percent through the end of 2010 vs. 2005, and the company is on track to improve fuel economy by more than 35 percent by 2015.
Second, Hyundai, the South Korean car company, posted a $650 million quarterly profit. The foreign corporation is seeking to aggressively target the American market with small, fuel efficient cars at a time when Toyota and GM are both struggling. This strategy has paid dividends for the smaller automaker, increasing market share to 4.3 percent from 3.1 percent a year ago. (Worldwide it reached 5 percent market share for the first time ever.) The company still lags its Japanese competitors in hybrid technology, but is focused on small cars with great fuel economy.
So not all American and foreign car companies are doing badly, but the trend is down over all. These two buck the trend and should receive kudos for the good work.