SEOUL – Hyundai Motor Co.’s quarterly net profit slumped 14 percent, missing estimates by a large margin, as the South Korean automaker continues to struggle with lackluster sales in its key markets, China and the United States.
On Wednesday, President Trump, easing the threat of a transatlantic trade war, agreed to refrain from imposing car tariffs with the European Union. It launched a Chinese version of its small SUV Kona after diplomatic ties normalized, but the recovery has been tepid with Hyundai’s share of the market dropping this year.
Hyundai’s operating profit slumped 29 percent to 951 billion won and sales rose 2 percent to 24.71 trillion won. Hyundai, which together with affiliate Kia Motors Corp, is the world’s fifth-biggest automaker, on Thursday reported a second-quarter net profit of 701 billion won, versus 817 billion won a year prior. The consensus was for 972 billion won.
It cut production at its U.S. factory and exported fewer vehicles to the United States over the quarter to whittle down inventories of unpopular sedans. The United States in May launched an investigation into whether imported vehicles pose a national security threat and President Donald Trump has repeatedly called for tariffs.
On Wednesday, the automaker said it had replaced its Chinese chief after less than one year. In China, Hyundai’s biggest market, retail sales fell 3 percent in January-June compared with the same period a year earlier. The South Korean automaker has been trying to restore sales in China following a spat between the countries over Seoul’s deployment of an anti-missile system.