On Friday, Hyundai and Kia said they "accept the administrative order," adding: "There have been no reported injuries or accidents from the cited issues."
SEOUL: Hyundai Motor Co’s quarterly profit fell 20%, hurt by South Korea’s diplomatic row with China that dragged on sales and losses from affiliate Kia Motors, but the carmaker’s shares rallied as results were better than expected.
Hyundai Motor, which together with Kia is the world’s No.5 automaker, on Thursday reported a net profit of 852 billion won (US$758.21 million) for the third quarter ended September, versus 1.06 trillion won a year ago. This was better than an average analysts’ forecast of 849 billion won.
Hyundai Motor shares rose over 6% to their highest since July, also supported by hopes that the worst may be over for the company’s sales in China, the world’s top auto market.
But analysts cautioned sluggish US sales may cap recovery.
The third-quarter results reflect losses at Kia stemming from the 1 trillion won in additional wages that the company said it expected to pay out after a court ruled in favour of workers in a labour dispute earlier this year.
Hyundai Motor, run by 79-year-old founding family member Chung Mong-koo, has not posted a year-on-year rise in quarterly profit since 2014 due to its delayed response to the burgeoning demand for sport-utility vehicles (SUVs) in the United States.
And compounding its problems further is China’s backlash over Seoul’s decision to deploy an anti-missile system, the US Terminal High Altitude Area Defence, that has resulted in lower demand for South Korean cars in the world’s top auto market.
The weakness in their biggest markets puts Hyundai and Kia on track to miss their global sales target for a third straight year in 2017, analysts have previously said.
Hyundai’s China sales fell 30% from January to September, while its US sales slid 13%.
Hyundai temporarily suspended China production in late August and early September as delayed payments prompted two foreign suppliers to stop providing parts.
In a bid to turn around business in its top markets, Hyundai Motor replaced the heads of its China and US operations in September.
Its sales in South Korea, its No.3 market, rose 8% from January to September.
Hyundai shares have risen about 7% this year, lagging the wider market’s 23% rally. - Reuters
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