Seoul  Hyundai Motor Co, South Korea's largest car maker, reported first-quarter profit that exceeded analysts' estimates, helped by sales of the Elantra sedan and i20 subcompact in Europe and the US.

Net income climbed 31 per cent to 2.45 trillion won (Dh8 billion), compared with 1.88 trillion won a year earlier, the Seoul-based company said in a statement yesterday. Profit beat the 2.07 trillion won average of 25 analyst estimates compiled by Bloomberg. Revenue increased 11 per cent to 20.2 trillion won.

The Sonata and Accent sedans fuelled a 15 per cent increase in US deliveries in the quarter, while the i20 hatchback helped drive a 13 per cent rise in Europe, bucking the region's econ-omic slump that pushed down demand for vehicles to a 14-year low last month. The company has said since January that it expects sales to climb 5.7 per cent to 4.3 million units in 2012 and reach seven million vehicles when combined with those of affiliate Kia Motors Corp.

"The global auto industry is expected to improve in the second half of this year, as US demand remains strong and China's growth turns around," said Shin Chung Kwan, an analyst at KB Investment and Securities Co. in Seoul. "I expect other major automakers to post improved operating profits."

US demand

Operating profit, or sales minus the costs of goods sold and administrative expenses, rose 25 per cent to 2.28 trillion won. That exceeded the 2.11 trillion won average analyst estimate compiled by Bloomberg.

Hyundai, the first among major global carmakers to report results for the latest quarter, gained 1.8 per cent to 262,000 won at the close in Seoul trading, while the benchmark Kospi index rose 0.1 per cent. The company raised its forecast for global car market growth in 2012 to 5.6 per cent, helped by demand in the US, Lee Won Hee, Hyundai's chief financial officer, said yesterday. This is bigger than the 3.6 per cent increase it forecast at the beginning of this year, he said.

"The increase in US auto industry's demand is more than we had expected," Lee said. "Our Elantra and Sonata supply is not able to keep up with the demand in the US."

Seoul (Bloomberg) Hyundai isn't concerned about stiffer competition from Japanese rivals such as Toyota Motor Corp and Honda Motor Co, which are rebounding from last year's natural disaster, he said. The South Korean car maker plans to introduce five new models in the US, including the new Santa Fe vehicle and a revamped Elantra.

In China, the world's largest car mobile market, Hyundai's sales rose 6.8 per cent in the first quarter, bucking a decline in industry deliveries, fuelled by demand for the Accent, whose deliveries jumped 80 per cent last quarter. To meet demand, Hyundai plans to start production of its China-exclusive Elantra, introduced as Langdong in the country, at the newly completed third plant, the company said this week.

Production at Hyundai's third plant in China will begin in July, which will increase the carmaker's production capacity to one million units in the country, according to the company.

Rising gasoline prices have undermined demand in China, where Volkswagen AG and BAIC Motor Corp warned this week of rising inventory levels in the industry. Average prices of cars produced in China have fallen for three straight months as quarterly sales shrank for the first time since 2005 during the first three months of the year.