Hyundai Motor Co.’s operating profit dropped 6.5% in the third quarter as South Korea’s largest automaker faced cooling demand for sport utility vehicles and rising marketing costs.
Operating income fell to 3.58 trillion won ($2.65 billion) from 3.83 trillion won a year earlier, the Seoul-based company reported Wednesday. Revenue rose 4.7% to 42.9 trillion won, helped by favorable exchange rates and improved product mix.
The results highlight growing challenges for Hyundai as global auto demand softens and competition intensifies. The company’s global retail sales declined 2.2% from a year earlier, with SUV sales dropping to 56.3% of total volume from 60%.
Marketing expenses climbed 9.3% year-on-year as the automaker boosted incentives to maintain market share. Rising costs pushed the operating margin down to 8.3% from 9.3% a year earlier.
While electric vehicle sales grew to 8.6% of total volume from 7.4%, the automotive division’s operating profit plunged 26.3% to 2.29 trillion won. The finance unit partially offset the decline with a 13.6% profit increase to 435 billion won.
