SEOUL, Oct. 30 (Korea Bizwire) – Hyundai Mobis Co., South Korea’s largest auto parts maker by sales, said Monday its third-quarter net profit plunged 32 percent on lower demand from China.
For the three months that ended on Sept. 30, net profit declined to 482.2 billion won (US$429 million) from 705.8 billion won a year earlier, the company said in a statement.
“The vehicle module and core component business from which the company earns about 80 percent of its overall sales was hit hard by declining demand from the neighboring country and the won’s strength against the Chinese yuan,” the statement said.
A strong won drives down the value of the yuan-denominated earnings when repatriated into the Korean currency.
Hyundai Motor Co. and its affiliate Kia Motors Corp. reported a sharp sales decline in China this year. Component supplies to the carmakers’ plants in China also fell sharply. The three companies are major affiliates of Hyundai Motor Group, the world’s fifth-biggest automaker by sales.
Carmakers and auto parts makers were among the businesses most affected by the diplomatic row underway between Seoul and Beijing over the deployment of an advanced U.S. missile defense system, called THAAD, in South Korea.
Consumer sentiment in China turned against Korean products as Beijing has opposed the THAAD deployment arguing it could be used against it. Seoul has said the system is purely aimed at deterring missile threats from North Korea.
Hyundai Mobis’ operating profit also fell 25 percent to 544.4 billion won in the third quarter from 721.7 billion won a year ago. Sales were down 0.1 percent to 8.773 trillion won from 8.778 trillion won during the same period, the statement said.
In the January-September period, net profit declined 27 percent to 1.726 trillion won from 2.35 trillion won a year earlier. Operating profit fell 23 percent year-on-year to 1.706 trillion won on sales of 26.323 trillion won, a 5.9-percent on-year drop, it said.