Hyundai’s quarterly profit slides 23 percent

On Wednesday, General Motors Co.GM 5.79 % posted a record third-quarter operating profit in its core North American unit, fueled by the strongest USA demand in a decade for profitable trucks and SUVs.

In a regulatory filing from its Yangjae-dong headquarters in southern Seoul on Thursday, the nation’s leading automaker announced that operating profit for the third quarter fell by 8.8 percent from a year ago to 1.5039 trillion won ($1.321 billion), which was a bit lower than market expectations.

Operating profit for Hyundai Motor fell for the third consecutive quarter, mainly due to weak foreign currencies in European and emerging markets. It was also the lowest since the fourth quarter of 2010, when the company reported 1.24 trillion won.

Analysts ahead of the results said Hyundai’s sales hit bottom in the third quarter and expected them to regain momentum starting in the fourth quarter, thanks to new model launches as well as the won’s weakness against the dollar.

The company has focused on sedans rather than SUVs, misreading consumer demand at a time of sluggish global demand for saloons such as the Elantra.

Both Hyundai and Kia slashed prices of sport-utility vehicles in China after sales were hit especially hard in a sharp slowdown in the world’s largest auto market. “We increased incentives in response”, chief financial officer Lee Won-hee told an earnings conference.

In the US, the company last month recalled almost half a million Sonata sedans for a possible engine flaw.

In South Korea, Hyundai’s union staged a strike for three days last month during the annual wage negotiations, affecting operations at all domestic plants.

Hyundai said July-September net profit was 1.21 trillion won ($1.1 billion), down 25% from 1.62 trillion won a year earlier.

The latest result marks a seventh straight quarter of earnings decline for Hyundai.

Hyundai Motor sold 1.34 million units on its home turf in the first nine months, down 0.8 percent from a year earlier.