South Korea’s top automaker Hyundai Motor Co. said on Thursday that its third-quarter operating profit fell 10.4 percent on quarter as it continues to struggle in the world’s largest automobile market.

The company in a regulatory filing reported an operating profit of 1.2 trillion won ($1.1 billion) in the quarter ending in September, which improved by 12.7 percent against a year-ago period when output had been interrupted by strikes and Chuseok holiday.

Shares were helped as its year-on-year performance significantly recovered against 16.4-percent fall in the first half.

Hyundai Motor’s stock closed Thursday at 159,500 won, up 11,000 won or 7.41 percent from the previous session.

Sales fell 0.4 percent on quarter, but gained 9.6 percent on year to 24.2 trillion won.

Net income statement, however, was the opposite as it reflected widening losses in the Chinese unit.

Net profit in the July-September period rose 2.8 percent from the second quarter while falling 16.1 percent when compared to the same period last year, but again suggests improvement in China.

Sales in emerging markets like Brazil and Russia helped to offset reduced sales in the world’s two largest markets - China and the U.S.

The company sold a combined 3,269,185 vehicles, down 6.0 percent on year, across the world in the first nine months this year. Total shipment gained 3.2 percent on year to 2,755,185 units when excluding sales in China. Domestic sales grew 7.5 percent on year to 517,350 units, while overseas sales were down 8.2 percent on year to 2,751,835 units.

Sales to Brazil and Russia rose 14.1 percent and 11.8 percent, respectively, on year. Shipments to China plunged 37.2 percent to 489,000 units, easing from a 42.4-percent dip in the first half. In U.S. it sold 265,000 units, down 11.8 percent on year.

As a result, its accumulated operating profit in the January-September period sank 8.9 percent on year to 3.8 trillion won and operating margin in the same period dropped 0.7 percentage points to 5.3 percent. Net profit plunged 29.9 percent over the same period, largely due to the sharp drop in income from the Chinese operation.

Sales expenses jumped 6.4 percent on year to 9.6 trillion won due to increased sales and marketing spending for promoting new cars.

The Korean carmaker hopes its new lineup will lift its outlook.

G70, the latest series in luxury brand Genesis, will debut in Asia and the Middle East later in the year and in North America in the first half next year, said Choi Byung-chul, chief financial officer of Hyundai Motor, in a conference call.

The Korean automaker on Wednesday also announced that it would invest $5 million in a U.S. mobility research center to gain an edge in the automated and connected car development race.

By Lee Seung-hoon, Park Chang-young, and Cho Jeehyun

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