Hyundai slides to 10th straight profit drop

South Korean automaker Hyundai Motor slipped to its 10th straight profit drop in the second quarter and warned of a tough second half in store as it soaks up stiff competition and shrinking demand for its mainstay sedans in the United States. The world’s fifth-biggest automaker, together with affiliate Kia Motors, said yesterday its April-June net profit slipped 2.6 percent to 1.66 trillion won ($1.46 billion) from a year ago. That was just below a consensus forecast of 1.67 trillion won from a Reuters’ poll of 19 analysts.

Over the past couple of years, the automaker has bet on new versions of former hit sedans to help it reverse out of its long-term profit slowdown. But low oil prices have steered United States consumers - the firm’s second-biggest market back to fuel-heavy sport utility vehicles and pickups, hitting Hyundai harder than peers like General Motors because of its sedan focus. “We expect competition to intensify in the US market in the second half,” Zayong Koo, Hyundai vice president in charge of investor relations, told an earnings conference. Koo said sales incentives to coax buyers into showrooms jumped in the first half, without saying how much the promotions cost Hyundai.

“The quality of US sales deteriorated in the first half,” Koo said, noting Hyundai sold more vehicles for corporate fleets in the half - cars that carry lower profit margins. To offset the sedan weakness, Koo said, Hyundai has started production of Santa Fe SUVs at its Alabama plant, targeting annual output of 50,000 cars. Hyundai warned its outlook for the second half had been made more uncertain by Britain’s June 23 vote to leave the European Union, clouding business prospects. The firm also has problems at home: It suffered partial strikes for four days last week in a dispute with the trade union that represents most of its domestic workforce. — Reuters

Canadian province slaps tax on foreign real estate buyers

The Canadian province of British Columbia announced yesterday it will impose a 15 percent tax on foreigners who buy residential property in Vancouver, a city with a housing shortage and soaring real estate prices. The tax-which will go into effect August 2 - is the latest in a series of measures designed to rein in the area’s overheated housing market, owed in part to an influx of foreign buyers. “Owning a home should be accessible to middle-class families, and those who are in a position to rent should be able to find a suitable home,” British Columbia Premier Christy Clark said. “These changes are about helping to make sure that British Columbians can continue to live, work and raise their families in our vibrant communities.” The additional property transfer tax rate of 15 percent will apply to both buyers who are foreign nationals and foreign-controlled corporations that register their residential purchases in Vancouver. A home valued at $2 million ($1.2 million USD), for example, would be taxed an additional $300,000 ($227,000 USD). For mixed-use property, the tax would apply to the residential component.