Hyundai Mobis said Friday that it has logged an operating profit of 360.9 billion won ($291 million) in the first quarter, down 26.9 percent on-year. 

Hyundai Motor Group’s auto parts making unit cited market contraction over impact of COVID-19 as a reason.

According to the company, its first-quarter sales came at 8.4 trillion won, down 3.6 percent on-year, while its total net profit recorded 348.8 billion won, which fell by 28.2 percent on-year. 

Hyundai Mobis said its main business of manufacturing modules and auto parts saw dwindled sales as it was influenced by the finished car market contraction over the economic impact of COVID-19.

The company’s module and auto parts manufacturing unit turned red and recorded an operating loss of 89.9 billion won from January to March.

“Due to COVID-19 outbreak, sales of module and auto parts in the Chinese market plummeted by 55.7 percent. This has attributed to the poor performance in the first quarter,” said a Hyundai Mobis official.

The company said that due to the prolonging economic impact over COVID-19 globally, further losses are likely.

To enhance profitability, Hyundai Mobis said it would continue to activate an emergency crisis management system and strengthen its competitiveness in sectors like technology for autonomous driving, connectivity and electrification.

It also added that it would inject 300 billion won to build new facilities at Uiwang research center to make it as a core center of research and development for electrification.

By Kim Da-sol (ddd@heraldcorp.com)