"Vehicle sales in China fell sharply due to worsening consumer sentiment in the wake of Seoul's decision to deploy the Terminal High Altitude Area Defense system on South Korean soil. Sales in the US also fell due to a lack of new models," a company spokesman said.

In the January-March period, Kia sold a total of 658,332 vehicles globally, down 6.5 percent from 704,458 units in the previous year, the company said.

Sales in China plunged 45 percent to 77,000 units from 140,000 units during the same period. Sales in the US also declined 21 percent to 75,000 from 95,000, it said.

Beijing has opposed the THAAD deployment in South Korea, arguing that it could be used against it, though Seoul and Washington have both reassured China that the anti-missile system is only aimed at countering missile threats from North Korea.

As the allies have nearly completed the deployment, South Korean businesses operating in China are expected to suffer local smear campaigns against their products for the time being.

"To offset declines in the world's biggest automobile market, the company will launch more customized models in emerging markets such as Russia, Africa and the Middle East," the spokesman said.

In broader efforts to boost sales, Kia plans to launch the Stinger sports car, the "K2 Cross" compact SUV, customized for Chinese customers in the first half, and in the second half an all-new compact crossover and the upgraded Sorento SUV.

The won's strength against the dollar also weighed on the quarterly results, the company said. A strong won drives down the value of dollar-denominated overseas earnings when they are repatriated.

The dollar fell to an average of 1,154.3 won in the first quarter from 1,201.4 won a year earlier, it said.

Operating profit also declined 40 percent to 382.8 billion won in the first quarter from 633.6 billion won a year earlier. Sales rose 1.5 percent to 12.84 trillion won from 12.65 trillion won during the same period, the filing said. (Yonhap)