SEOUL, July 25 (Yonhap) -- Hyundai Motor Co., South Korea's largest automaker, said Thursday its second-quarter net profit edged down 1 percent from a year earlier as its work stoppage and rising costs cut into its bottom line.
Net profit reached 2.52 trillion won (US$2.2 billion) in the April-June period, compared with 2.54 trillion won a year earlier, the Seoul-based company said in a regulatory filing.
Sales rose 5.7 percent on-year to 23.1 trillion won in the three-month period, while operating profit dropped 5.2 percent to 2.4 trillion won.
Hyundai Motor said it sold 2.39 million units around the world in the first six months of this year, up 9.5 percent from a year earlier.
The company also said, in overseas market alone, it sold 2.06 million units between January and June, up 11.4 percent from a year earlier. The strong overseas sales made up for lackluster domestic demand, which contracted 0.7 percent on-year to 325,518 units.
Shares of Hyundai Motor closed at 224,500 won on the Seoul bourse on Thursday, up 0.45 percent from the previous session's close. The second-quarter earnings statement came out before the market closed.
Lee Won-hee, Hyundai's chief financial officer, told analysts that his company is pushing to increase its production capacity in China in anticipation of a steady demand of cars in the world's largest auto market.
Still, Lee did not give a specific time frame.
Currently, Hyundai operates three assembly plants in Beijing through a joint venture with Beijing Automotive.
Hyundai said uncertainty is likely to persist in the second half due to a possible change in the U.S. monetary easing policy and prospects of protracted low economic growth in China.
Hyundai also said it expects a fierce competition with Toyota Motor Corp. and other Japanese rivals in the global market as the Japanese carmakers can take advantage of the weak Japanese currency.
The yen's depreciation could make Japanese cars cheaper, undermining Hyundai's competitive edge.
Lee also said that his company is preparing to roll out diesel-powered passenger vehicles in a bid to counter aggressive sales of diesel-powered foreign cars.
A total of 29,478 diesel-powered foreign cars were sold in the first four months of this year, or 61.1 percent, while gasoline-powered foreign vehicles accounted for 35.4 percent, or 17,070 units, according to the Korea Automobile Importers and Distributors Association.
The shift comes as European carmakers introduced diesel-powered cars that have better fuel efficiency and emit less carbon dioxide, one of the greenhouse gases largely responsible for global warming.
The weekend work stoppage caused by a dispute over weekend wages prevented Hyundai from producing 79,000 vehicles between March 9 and May 18, costing the carmaker 1.7 trillion won ($1.5 billion) in lost production.
Hyundai and its smaller sister company Kia Motors Corp. are the two major flagship units of South Korea's Hyundai Motor Group, the world's fifth-largest carmaker.
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