Hyundai Mobis posts lower Q3 profit, blames ChinaHyundai Mobis, Korea’s largest auto parts supplier, posted a third-quarter net profit plunge of 32 percent on Monday, citing lower demand from China.
Between July and September, net profit declined to 482.2 billion won ($429 million) from 705.8 billion won a year earlier.
“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 China and the won’s strength against the Chinese yuan,” the company said in a statement. A strong won drives down the value of yuan-denominated earnings when converted to Korean currency.
Hyundai Motor and its affiliate Kia Motors reported a sharp sales decline in China this year. Component supplies to the automakers’ plants in China also fell sharply. The three companies are major affiliates of Hyundai Motor Group, the world’s fifth-biggest automaker by sales.
Car manufacturers and parts suppliers were among the businesses most affected by the diplomatic row between Seoul and Beijing over the deployment of a U.S. missile defense system known as Thaad. Consumer sentiment in China turned against Korean products as Beijing has opposed Thaad’s deployment, arguing it threatens regional security interests.
Hyundai Mobis’ operating profit 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.