Hyundai Motor Q3 profit plunges on weak China sales

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South Korean carmaker Hyundai Motor posted a 16-percent fall in third-quarter profits Thursday as Seoul's diplomatic row with Beijing over a controversial US missile system continued to batter the firm's business in China.

Net profit for July to September plummeted 16 percent from a year ago to 939.1 billion won (835 million US dollars), the company said in a regulatory filing.

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Hyundai, along with its subsidiary Kia, forms the world's fifth-largest automaker. It has suffered falling sales in China – the world's largest car market – after Seoul decided late last year to deploy a powerful US missile defense system despite opposition from Beijing.

China sees the deployment of the THAAD (Terminal High Altitude Area Defense) – designed to guard against threats from the DPRK – as a threat to its own security.

The move prompted Beijing to slap a series of measures against South Korean businesses and sparked boycott campaigns among Chinese consumers against South Korean goods.

Hyundai's third-quarter passenger vehicle shipments in China were down 26.6 percent year-on-year, it said. That was a smaller fall than in the previous three months, when they plummeted 64.2 percent.

Men cycle past an advertising billboard for Hyundai cars opposite the plant of Hyundai Motor Co. in Beijing, August 30, 2017. /Reuters Photo‍

But commercial vehicles fared worse, slumping 35.0 percent in July-September, compared to 19.8 percent in the second quarter.

Hyundai blamed an "external factor" for weak sales in China, adding crippling competition and growing marketing costs in the US took a further toll on its profits.

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The number of cars sold worldwide was down 1.2 percent in Q3, it said. But sales rose 9.6 percent by value, largely due to a low comparison base as a result of a widespread strike a year ago.

Despite the fall in net profits the figures beat most analysts' expectations and Hyundai shares were up 6.7 percent in mid-afternoon trading at 158,500 won (140.68 US dollars).

Source(s): AFP