SEOUL: Hyundai Motor Co on Thursday reported a 7% fall in third-quarter operating profit, hurt by warranty costs for its Santa Fe SUVs and as a global slowdown in car demand weighed.
Hyundai Motor, which together with affiliate Kia Corp is the world’s third-biggest automaker by sales, reported operating profit of 3.6 trillion won ($2.6 billion) for July-September, compared with 3.8 trillion won in profit in the same period a year earlier.
The result was also lower than a 3.9 trillion won average of 20 analyst estimates compiled by LSEG SmartEstimate, which is weighted towards estimates from analysts who are more consistently accurate.
“Hyundai Motor expects the uncertain business environment to continue, including a slowdown of growth in major markets,” it said in a statement.
The also result reflected provision costs of 320 billion won related to a warranty extension for engines of Santa Fe SUVs in the United States.
Hyundai Motor’s share price extended its decline on Thursday, falling 3.7% after the earnings announcement.
Major European carmakers including Volkswagen Mercedes-Benz and BMW have flagged a worsening outlook for auto demand as well as rising costs, wiping billions of euros off the sector’s market value.
Hyundai Motor’s global retail sales fell 5% in the third quarter from a year earlier, as a decline in sales in Europe offset sales increases in the United States and South Korea.
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While Hyundai’s sales of electric vehicles fell, sales of hybrid EVs jumped over 40% from a year earlier, Hyundai said.
Hyundai said in August that it planned to double its hybrid vehicle line-up to counter a slowdown in global electric vehicle demand, while cutting targets for EV sales and delaying the development and launch of some of EV models.
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