Hyundai profit down 20 percent as China woe continues
SEOUL, South Korea (AP) — Hyundai Motor Co., South Korea’s largest automaker, reported a 20 percent plunge in its net profit Thursday, continuing its losing streak to nearly a fourth year, as its sales remain weak in China due to anger over a missile-defense system.
Hyundai’s overall vehicle sales except China actually increased during the third quarter about 7 percent thanks to the popularity of its new products, Kona and G70. But that was not enough to offset its sales decline in the world’s two largest economies, the U.S. and China.
Its July-September net profit was 852 billion won ($758 million), compared with 1.1 trillion won ($978 billion) a year earlier.
The result was in line with expectation. Sales rose 10 percent to 24.2 trillion won while operating income rose 13 percent to 1.2 trillion won.
The maker of Genesis and Sonata has recorded profit loss since late 2013 as its passenger sedans fell out of favor while its rollout of sports utility vehicles was slow.
Compounding its challenge, diplomatic tensions between Beijing and Seoul took a toll on many South Korean businesses in China. During the first half of 2017, Hyundai’s sales in China were slashed to nearly half as China’s anger over South Korea’s deployment of a U.S. missile-defense system hurt its sales.
During the first nine months of this year, Hyundai’s car sales declined 6 percent to 3.3 million units.
To counter sales decline in China and the U.S., Hyundai introduced a new vehicle in China, the Reina, and a new assurance program for U.S. shoppers earlier this month, to increase transparency of car pricing and cut shopping time for buyers.
The company expected that the difficulties would continue throughout the fourth quarter.