SEOUL (Reuters) -- Hyundai Motor Co., South Korea's biggest car maker, is expected to report on Friday an 85 percent jump in quarterly earnings, propelled by record sales of its New EF Sonata sedan and Santa Fe sport utility vehicle.
Bumper exports to meet soaring year-end demand drove up Hyundai's net profit in the final quarter, along with falling losses from its troubled credit card affiliate, analysts said.
Solid foreign demand should put Hyundai, which controls nearly half of the South Korean auto market, on track to achieve a record sales target of 2.145 million vehicles in 2004, following three consecutive years of record sales, they said.
"Hyundai factories were running on all cylinders last quarter to meet rising foreign demand," said Lee Young-min, an auto analyst at Meritz Securities. "Exports were more than enough to offset sluggish local sales."
Hyundai, 10 percent owned by U.S.-German auto maker DaimlerChrysler AG, has said exports, which make up 60 percent of earnings, rose 11 percent to 424,413 units in the final quarter and local sales fell 15 percent to 149,634 units.
Hyundai earned a net profit of 469.6 billion won ($410.7 million) for the three months ended December 31, according to the consensus estimates of five analysts surveyed by Reuters. This compares with a profit of 253.9 billion won a year earlier.
Sales rose 5.9 percent to a record 7.2 trillion won, the poll showed. Hyundai Motor is due to release results at 11 a.m. (0200 GMT) on Friday.
Analysts said a partial stoppage by workers at Hyundai would not have a significant impact on earnings.
The expected profit jump compares with a 60 percent rise in quarterly profit for Japan's top auto maker, Toyota Motor Corp., a Hundai rival that reported last week.
LOCAL SALES A DRAG
Hyundai expects 2004 to be a banner year.
Its sales target this year is a 13 percent rise from provisional sales of 1.899 million units in 2003.
But sluggish domestic sales, hit by tighter lending rules and widespread defaults in the credit card sector, have cast a shadow on the near-term outlook for sales, analysts said.
"The first-quarter outlook is not good. The local consumption recovery is under way but is too slow to stimulate demand for auto spending," said Kim Hag Ju, an analyst at Samsung Securities.
Sales at Hyundai Motor and smaller rivals fell a combined 10 percent in January as debt-laden domestic consumers remained reluctant to shell out on new cars.
The weak sales were due in part to a three-day Lunar New Year holiday in January, auto makers said. Local sales fell 39 percent, eclipsing a 27 percent jump in exports.
Kim of Samsung also pointed to growing inventories in the key U.S. market that may slow exports in coming months.
Nevertheless, many analysts remain optimistic that expected launches of new models should help fan consumer appetite. An improving economy would help, too.
Hyundai unveiled its new Tucson SUV at last week's Chicago Auto Show. Tucson, a smaller version of the Santa Fe, will go on sale late this summer in the United States. Consumers at home and abroad are also keenly awaiting the launch of the remodeled Sonata, the top-selling sedan in South Korea.