À̹ÌÁö È®´ë South Korea¡¯s largest automaker Hyundai Motor Co. posted a 6.8 percent on-year drop in operating profit and 20.5 percent plunge in net income for the first quarter this year due to sharp sales decline in China and massive recall.
The company said in a regulatory filing on Wednesday that its operating profit in the January to March period fell 6.8 percent from a year earlier to 1.25 trillion won ($1.1 billion). Its net profit plunged 20.5 percent on year to a seven-year low of 1.4 trillion won as Beijing-led boycott on Korean brands following Seoul¡¯s decision to deploy strongly-protested U.S. missile system in Korea took heavy toll on sales in the world¡¯s largest car market.
Sales rose 4.5 percent on year but dropped 4.8 percent on quarter to 23.36 trillion won.
Shares of Hyundai Motor closed Wednesday at 151,500 won, up 4.84 percent or 7,000 won from the previous session.
The poor results were widely expected as Hyundai Motor last month said combined sales of Hyundai Motor and its sister company Kia Motors Corp. in China plummeted 52.2 percent on year to 72,032 units.
The performance is reflected in the net income on the consolidated statement as its venture in China is jointly run with Beijing Automotive Industry Holding Co.
Stronger won from the dollar weakening trend also worked unfavorable to the exporter.
The company sold total 405,929 vehicles last month, down 6.3 percent from a year earlier. Its domestic sales increased 2.6 percent to 63,765 units but overseas sales fell 7.8 percent to 342,164 units.
Product glitches also dented its performance. It had to reflect the spending of 200 billion won for recall for more than 1.47 million vehicles equipped with Theta-2 engine early this month.
Market analysts predict the second quarter results would be as bad as sales in China are estimated to have halved from a year-ago in April as well. China made up 23.5 percent of Hyundai Motors overseas sales last year and 21.5 percent Kia Motors¡¯.
The company pledged to work hard to boost its Chinese operation by releasing new cars and customizing existing cars to better appeal to Chinese drivers. It also plans to expand social contribution activities to regain trust of Chinese customers, said Koo Ja-yong who is in charge of investor relations (IR) during a conference call.
Hyundai Motor is set to release its first compact sport utility vehicle Kona in June in China, and the third Genesis model G70. It also unveiled all-new ix35 SUV designed exclusively for the Chinese market at the Shanghai International Automobile Industry Exhibition last week.
By Lee Seung-hoon
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]