South Korea’s largest automaker Hyundai Motor Co. posted a 23.7 percent on-year drop in operating profit for the second quarter this year as its sales in China sharply declined amid growing negative sentiment towards Korean brands following Seoul’s decision to deploy a U.S. antimissile system.

The company said in a regulatory filing on Wednesday that its operating profit in the April to June period fell 23.7 percent to 1.34 trillion won ($1.2 billion) from a year ago period. Its net profit plummeted 48.2 percent on year to 913.6 billion won with drastic sales decline in the world’s largest auto market. Sales contracted 1.5 percent on year to 24.3 billion won.

Operating profit in the first six months declined 16.4 percent on year to 2.6 trillion won while sales rose slightly by 1.4 percent to 47.7 trillion won. Operating margin fell 1.2 percentage points to 5.4 percent.

Shares of Hyundai Motors closed Wednesday at 148,000 won, up 2,000 won or 1.37 percent from the previous session.

The company sold total 2,197,689 vehicles, down 8.2 percent on year, across the world in the first six month period. But total shipment slightly improved 1.5 percent to 1,876,052 vehicles when excluding sales in China. Its domestic sales slipped 1.7 percent on year to 344,130 units.

The poor results were largely due to slowdown in its Chinese operation that started early this year amid ongoing diplomatic row over Korea’s deployment of U.S. missile shield. Consumers in China have been boycotting Korean brands, and the Korean automakers Chinese rivals have been capitalizing on the loss of Hyundai and Kia in the domestic market.

The combined sales of Hyundai Motor and its sister Kia Motors in China in the January-June period sank 47 percent on year to 429,000 units from last year’s 808,000 units.

The company plans to recover its sales by introducing new models. It recently launched compact sport utility vehicle Kona to capture the fast-growing SUV market last month and plans to introduce third Genesis model G70 later this year to win premium sedan market.

Chung Eui-sun, vice chairman and heir to Hyundai Motor Group, has been frequenting Hyundai Motor’s overseas offices including China to help salvage faltering Chinese business and improve the automaker’s overseas operations. Hyundai Motor plans to focus its efforts on expanding its shares in Europe and emerging countries while developing new markets.

By Lee Seung-hoon and Park Chang-young

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]