Strike, demand sends Hyundai profit crashing 10pc

HYUNDAI Motor’s thirdquarter profit fell to its lowest level in almost seven years, well below forecasts, due to a strike that dented production and weak demand in emerging markets.

South Korea’s largest automaker said its July-September earnings fell 10 per cent from a year earlier to 1.06 trillion won ($A937 million).

That was the lowest profit since the first quarter of 2010, when Hyundai adopted international financial reporting standards.

Analysts had forecast 1.3 trillion won in earnings, according to FactSet, a financial data provider.

Hyundai, part of the world’s fifth-largest auto group, said its sales in January-September declined 2 per cent from the previous year to 3.5 million units, falling at home and overseas.

It blamed production disruptions from a strike. Workers walked out in annual wage negotiations, disrupting manufacturing of about 95,000 vehicles.

Modest demand in Europe and the US, and sluggish sales in Brazil and Russia offset sales growth in China, Hyundai said.

Hyundai has been struggling to increase its production of sports utility vehicles that have seen growing demand around the world. It also has launched the Genesis luxury sedan as an independent brand.

But its market share at home has been falling. Quality issues also have marred its reputation.

Yonhap news agency reported Hyundai was cutting salaries of 1000 of its executives by 10 per cent.

Third-quarter sales fell 6 per cent to 22.1 trillion won, the company said. Operating income sank 30 per cent to 1.07 trillion won.