LONDON (Reuters) - Automakers Volkswagen (VOWG_p.DE), Chrysler and Hyundai (005380.KS) pulled away from rivals on Thursday, unveiling strong sales and profits driven by growth in the Americas and Asia.
Carmakers that rely heavily on European sales, by contrast, are struggling with cut-throat price competition in a dwindling market as government budget cuts, weak wages growth and rising unemployment depress consumers’ spending power.
Robust sales in North America helped U.S. maker Chrysler Group LLC, managed by majority owner Fiat Spa FIA.MI, to post its best quarterly profit since its 2009 bankruptcy.
Chrysler’s auto sales rose 33 percent in the quarter, led by its home U.S. market, where it gained market share on a first-quarter sales jump of 36 percent. Quarterly profit jumped to $473 million from $116 million a year ago.
“Another positive quarter - built on sales gains that have surpassed the industry average - is affirmation that the Chrysler team is maintaining its focus,” said Sergio Marchionne, chief executive of both Chrysler and Italy’s Fiat.
Fiat’s European business is expected to post a loss, as the region’s debt crisis takes its toll. It releases consolidated Fiat-Chrysler results later in the day.
Korean automaker Hyundai Motor’s (005380.KS) quarterly net profit rose almost a third, driven by growth in the United States and China.
Even in sickly Europe, Hyundai bucked the trend, as modestly priced compact cars including its revamped i30 model and long warranties fared better with cost-conscious drivers.
The automaker, which with its affiliate Kia Motors (000270.KS) is the world’s fifth-largest, managed a double-digit percentage sales increase in Europe in the first quarter, even as the wider market shrank 8 percent. It has also benefited from free trade deals with Europe and the United States.
“There are few risks for Hyundai’s strong growth momentum,” said Kang Sun-sik, a fund manager at Woori Asset Management, which holds Hyundai stock. “Its overall sales remain strong globally thanks to improving brand and quality; the won is trading relatively cheap, and its key rivals, especially Japanese, continue to struggle.
Germany’s Volkswagen posted a surprise 10 percent gain in operating profit for the first quarter.
Europe’s biggest carmaker stood by its goal to increase vehicle deliveries beyond last year’s record 8.3 million vehicles, relying on expanding markets in the United States, Russia and Latin America.
A day earlier, French maker PSA Peugeot Citroen (PEUP.PA) forecast a tough second quarter on sagging demand in its core domestic and southern European markets, while Renault said (RENA.PA) its first quarter sales dipped 8.6 percent.
Car sales in Europe fell for a sixth straight month in March, with a 6.6 percent decline, data from industry association ACEA showed earlier this month.
Increases in the German and British markets were not enough to offset declines in France and Italy.
Reporting by Bernie Woodall, Hyunjoo Jin and Andreas Cremer; Writing by Helen Massy-Beresford; Editing by Will Waterman and David Holmes