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Analysis of Hyundai Motor Company - Essay Example

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Analysis of Hyundai Motor Company

The company in focus for this paper is Hyundai motors. Hyundai is a Korea based company but it has grown steadily in the automotive market over the past few years. Automotive industry is highly competitive these days, according to Bloomberg Businessweek (2012), the US automotive market is highly competitive these days, home companies like General Motors, Ford Motor Co. and Chrysler Group LLC are expected to lose market share to companies like Toyota and Honda. Hyundai Motor Co. has reported to have doubled its share in US automotive market as compared to their share in 2005. It is still expected to gain 0.1 % market share more than the last year. According to the customer retention study carried out by J.D. Power and associates in 2011, Hyundai has been declared to be number one in customer retention. According to the study Hyundai’s customer retention rate has increased by 4 points thus raising it to 64% in the year 2012, which implies that among the automotive brands customers were the most loyal towards Hyundai. Its brand name is currently measured to be nearly $5 billion. As the future of every company is based on the relations it has with its customers, thus it’s safe to say that Hyundai's future seems even more promising. In this paper the company’s performance will be analyzed as to see whether its market share value, which is currently $ 203.16 (Won 229,000), according to the company’s overview, reflects the actual performance of the company or not. As the consolidated reports for the year ended 2011 are not available yet, so the analysis will be carried out for the year ended 2008 to year ended 2010. Along with the comparison with last years, the performance of the company will also be compared with the financial performance of Toyota Corp. Financial Analysis As the purpose of this paper is to evaluate the reflection of the company’s performance on its share value, the basic analysis will be carried out on the profitability of the company with relation to the shareholders’ equity. Keeping the performance of the company from the year 2008 to 2010 in mind, it will be analyzed how the company is performing over the past few years as well as with its competitor Toyota Corp. The profit margin of the company drastically fell to 4.42% from 13.7% in 2009. The company has been able to recover a bit, the profit margin has increased to 7.09% in 2010, and even though the consolidated statements of the company for the year 2011 are not yet released, it has been reported that Hyundai has broken its sales records in the year 2011, so a probable increase in profitability can also be predicted. As opposed to the sketchy performance over these years, the company is still doing better as compared to Toyota Corp., which reported a profit margin of only 1.54% in the year 2010. A company’s revenue is highly dependent on the fact that how the company is utilizing its assets for generating sales every year, as is defined by the net return on assets, which has prominently increased for Hyundai over these three years from 2.71% to 19.3%, it would ...Show more


The main purpose of this paper is to analyze a company’s performance to see if its current share value is fairly reflecting its financial performance. The company chosen for this paper is Hyundai Motor Company. The study analyses its performance over the years from 2008 to 2010…
Author : tmayer
Analysis of Hyundai Motor Company essay example
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