Hyundai Motor's domestic business sector swung to the red last year. It is the first case since 1998, when it can be confirmed through a business report.
According to a Hyundai Motor's business report on April 3, the company incurred an operating loss of 59.32 billion won based on separate financial statements, excluding gains and losses on the evaluation of the equity method of foreign corporations and related companies.
Hyundai Motor's headquarters posted an operating profit of 2.16 trillion won in 2017, down 19.8 percent from 2.69 trillion won a year earlier.
Some analysts say that the reason behind the deficit-switching is that sales costs have soared by about 4 trillion won. Sales costs at Hyundai Motor's headquarters rose 11.59 percent to 36.4 trillion won last year from 32.6 trillion won in 2017.
Sales rose 3.7 percent year-on-year to 43.16 trillion won in the same period, but they remained in the red due to sales costs, which rose by more than 11 percent. Its gross profit also decreased to 6.756 trillion won from 8.984 trillion won a year earlier due to increased sales costs.
According to the business report, Hyundai Motor's headquarters' R&D costs amounted to 2.57 trillion won last year, about 95 percent of the 2.74 trillion won in connection-based R&D spending.
As the auto industry is in charge of the development and production of eco-friendly cars such as electric vehicles and hydrogen electric vehicles in Korea, the profitability is likely to decline for the time being.