Samsung loses top spot to Hyundai Motor

Samsung Group has been the nation’s foremost conglomerate over the first decade of the new millennium but Hyundai Motor Group is threatening to steal the top spot.

According to data from the Korea Exchange, Sunday, listed subsidiaries of Hyundai Motor netted 9.17 trillion won in profits during the first half of 2011, up 42.5 percent from a year before.

This marks the first time that Korea’s No. 1 auto manufacturer has surpassed Samsung, which racked up 8.1 trillion won in net profits over the same six-month span, down 20.6 percent from 2010. Firms whose fiscal year ends in March were excluded from the comparison.

Market observers point out that Samsung Group may be unable to stay at the top of Korea Inc. if an ongoing paradigm shift to software is not incorporated.

``Samsung Group might see its competitiveness further weaken in its flagship business in the electronics segment where the focus has migrated from hardware to software,’’ said an analyst at a local asset management firm.

``Hardware-centric companies such as Samsung Electronics may languish in the coming years unless they differentiate themselves.’’

As the iconic affiliate of Samsung Group, Samsung Electronics posted just a 5.37 percent rise in turnover in the Jan.-June period while its net profits plunged by 23.9 percent on a yearly basis to 6.29 trillion won.

Out of its three major businesses of flat-panel displays, semiconductors and mobile handsets, the first two have suffered lately due to declining product demand amid the global financial unrest.

Its wireless division also faces big challenges from Apple and Google, in particular, after Google acquired Motorola Mobility last month.

Samsung utilizes Google’s Android as its main operating system for smartphones but there is a general panic that Google might limit access when the search engine giant starts rolling out handsets based on Motorola Mobility facilities.

LG, another hardware-driven chaebol, faced a free fall in the totem pole as its major unit making flat-screen TVs and mobile phones, LG Electronics, struggles.

The group recorded a bottom line of 6.09 trillion won during the first half of 2010 to rank third after Samsung and Hyundai Motor groups but the figure more than halved to 2.35 trillion won this year.

As a result, its position plummeted to fifth outpaced by POSCO and Hyundai Heavy Industries.


Source: The Korea Times