US missile system claims another victim: Hyundai Motor

US missile system claims another victim: Hyundai Motor

US missile system claims another victim: Hyundai Motor

The result was slightly above the market consensus of 1.22 trillion won.

South Korea's Hyundai Motor posted a 21 percent fall in quarterly net profit, dragged down by a USA recall and sales declines in China stemming from political tensions.

The company said its January-March net profit was 1.3 trillion won ($1.2 billion), down 21 percent from 1.7 trillion won a year earlier. "And they expect Hyundai's introduction of new models and recovery in emerging markets will help boost its profit". Operating profit fell 7 percent to 1.3 trillion won.

Operating profit also declined 40 percent to 382.8 billion won in the first quarter from 633.6 billion won a year earlier.

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Hyundai sold 206,000 units in the first three months this year in the world's largest auto market, down 14.4 percent from a year earlier. Hyundai greatly cut production at China factories in March to decrease stocks, sources previously informed Reuters.

Despite challenges in China and the United States, Hyundai expects a "gradual recovery in earnings" as it plans to launch a small SUV and G70 Genesis sedan in South Korea and Europe this year, which garner higher margins than small sedans, and as Brazil and Russian Federation are recovering.

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"China sales falls in March are not the result of internal aspects, however the outcome of growing anti-Korean sentiment since late February, and some rivals making the most of anti-Korean sentiment in marketing", stated Zayong Koo, Hyundai vice president, on a teleconference.

Around midnight on Wednesday morning Seoul time, the US military began installing components of the Thaad battery at a golf course in South Korea, prompting an angry rebuke from China's Foreign Ministry later in the day.

The Seoul-based company's pain in China comes against the backdrop of the continuing dispute over the deployment of the Terminal High-Altitude Area Defense, or Thaad, system, which Beijing opposes.

Hyundai's performance in the USA, its second-biggest market, also dropped 3 percent, outweighing growth in Western Europe and India.

Deliveries in China slumped the most among its regions in the first quarter due to a lack of SUV models and a boycott by consumers over South Korea's decision to host a US missile shield system, known as Thaad.

Hyundai Motor was also hit by massive recalls it estimated to cost around 200 billion won ($178 million) during the first quarter.

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