Workers give the final checkup on the cars at the Saitama factory of the Honda Motor Co. in Sayama north of Tokyo. (AP) TOKYO/SEOUL: Top Asian car makers Honda Motor and Hyundai Motor Co. painted vastly different portraits Thursday, with Hyundai turning in a stellar quarterly performance while Honda struggled to overcome supply woes after Japan's devastating earthquake. Japanese automakers have slashed production and are yet to figure out how fast parts makers affected by the magnitude-9.0 earthquake on March 11 will recover, making it difficult to give earnings forecasts for the current year to March 2012. South Korean rival Hyundai has been picking up the slack, helped by a popular line-up of new models which have been selling strongly in top markets China and the United States. Its shares, up more than a third this year, surged 7 percent to a record high after its results. “Hyundai has been emerging as an alternative to Japanese cars, shaking off its image as a maker of cheap cars,” said Lee Dong-jin, a fund manager at KTB Asset Management. “It's now seeing some benefits from increasing production at overseas plants while the world took a hit from the financial crisis.” Hyundai said its net profit rose 47 percent to 1.88 trillion Korean won ($1.7 billion) in January-March, compared with 1.28 trillion won a year ago. Honda, hurt by supply chain disruptions as a result of the catastrophes, said its net profit for the January-March quarter fell 38 percent to 44.55 billion yen ($541.8 million). Operating profit fell 52 percent to 46.21 billion yen compared with an average estimate of 103.1 billion yen from 15 analysts. A survey of 15 analysts put Honda's operating profit for the full year to March 2012 at 394 billion yen, down from 569.8 billion yen in the business year that just ended. The company said it would not provide an outlook for the new business year until at least May as it struggles to measure the speed of its recovery. Hyundai was reporting earnings on a consolidated basis to reflect earnings of its affiliates including financial operations under new accounting rules, and there were no consensus guidelines for the result. Hyundai outperformed its global peers in the last quarter thanks to popular models such as the Sonata mid-sized sedan and the Elantra compact in the United States, South Korea and other markets. The company said sales were especially good in the United States and China last quarter, rising by 28 percent and 30 percent respectively, while its overall global sales rose 10 percent from a year ago. “The first quarter earnings are very good and the outlook is even rosier...(but) one risk factor is exchange rate trends, since export markets account for a large part of Hyundai Motor's earnings,” said Kang Sun-sik, chief analyst at Woori Asset Management. The momentum is set to pick up in April-June as Hyundai and its Kia affiliate enjoy higher pricing, partly helped by the output cuts in Japan. “Before the earthquake, concerns lingered about price competition, but we can pretty much rule that out now,” said Yoon Pil-joong, an analyst at Samsung Securities. Hyundai and Kia are targeting combined sales of 6.33 million vehicles this year, which could be on par with Toyota's sales, which analysts forecast at 6.3 million to 7 million While the supply bottleneck of certain specialty parts such as microcontroller units made by Renesas Electronics Corp has also hit some automakers outside Japan, most of the pain is being inflicted on domestic brands such as Honda, where output remains at half the level planned before the quake. Honda and Toyota Motor have forecast a return to normal production by the end of 2011, but said they do not know how quickly volumes will pick up.
