SEOUL-Hyundai Motor Co. revealed the financial fallout from a diplomatic flare-up between Seoul and Beijing over a U.S. missile-defense system, as a drop-off in China sales dragged down first-quarter net income by 21% from a year ago.
Hyundai said Wednesday that revenue in China, the South Korean auto maker's largest market, fell by 14% from the previous year and by 46% from the last three months of 2016. By contrast, U.S. sales in the first quarter rose by 10% compared with the October-to-December period.
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The company's net income was 1.4 trillion Korean won ($1.2 billion), compared with 1.8 trillion won a year earlier. Overall revenue rose 4.5% to 23.4 trillion won, aided by year-over-year sales growth in Russia, Brazil and India.
The Seoul-based company's pain in China comes against the backdrop of the continuing dispute over the deployment of the Terminal High-Altitude Area Defense, or Thaad, system, which Beijing opposes.
Around midnight on Wednesday morning Seoul time, the U.S. military began installing components of the Thaad battery at a golf course in South Korea, prompting an angry rebuke from China's Foreign Ministry later in the day.
"China strongly urges the U.S. and South Korea to stop actions that escalate regional tension and harm China's strategic security interests and to cancel the Thaad deployment, withdrawing the relevant equipment," Foreign Ministry spokesman Geng Shuang said at a daily briefing in Beijing.
A Chinese consumer boycott of South Korean goods and stores has bruised the country's companies including retail conglomerate Lotte Group and cosmetics makers such as AmorePacific Corp., whose stock slipped Wednesday after it reported weaker-than-expected first-quarter earnings.
Hyundai had been struggling in China even before the recent geopolitical strife because of the emergence of lower-cost domestic rivals in Asia's largest economy.
Hyundai, the world's fifth-biggest auto maker by sales when combined with affiliate Kia Motors Corp., shipped 1.09 million vehicles in the first quarter, a slight drop from a year ago.
Lilian Lin in Beijing contributed to this article
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(END) Dow Jones Newswires
April 26, 2017 06:47 ET (10:47 GMT)