No Profits
Hyundai Motor Company’s operating profits for the second quarter of this year are estimated at around 1.7 trillion won (US$1.5 billion), at least 14 percent less than a year ago. Samsung Electronics’ profits for the same quarter stood at 6.9 trillion won (US$6.0 billion), far below expectations. Daewoo Shipbuilding & Marine Engineering is predicted to have recorded 2 to 3 trillion won (US$1.7 to $2.6 billion) in operating losses between April and June, while the Iranian nuclear deal is expected to drag down international oil prices to affect the businesses of oil companies such as SK Innovation.
“China is about to overtake Korea, and the United States and Japan are developing faster and faster,” said Kwon Tae-shin, head of the Korea Economic Research Institute, adding, “The Chinese and Japanese governments are leading facility investment in their respective countries, unlike the Korean government.”
These days, China’s economic outlook is getting darker, as evidenced by the recent stock market plunge. If the Chinese economy simks, Korean manufacturers would not be able to avoid the impact.
Samsung Electronics’ share in the global smart phone market has dropped to 25 percent or lower since the appearance of Chinese smartphone makers. The profits of the home appliance divisions of both Samsung and LG Electronics have plummeted due to the weak yen. Hyundai Motor Company’s share in the Chinese market has dropped from 9.5 percent to 7 percent or so due to the same reason. China’s increasing self-sufficiency has affected Korean oil and petrochemical companies, and Chinese steel makers are underselling their products to beat the recession. In the meantime, the Tsinghua Unigroup is looking to take over American semiconductor firm Micron Technology.