Seoul  - Hyundai Motor Co's profits for the fourth quarter of 2008 dropped 28 per cent year-on-year as the South Korean automaker struggled with rising warranty and marketing costs.

Net income for the months from October to December dropped to 243.6 billion won (176.8 million dollars), the company said Thursday.

Sales of South Korea's leading carmaker rose by 1.1 per cent to 8.8 trillion won while operating profit was down 8.9 per cent to 581 billion won, compared with 637.8 billion won in the same quarter last year.

Net profit for 2008 declined by 13.9 per cent to 1.44 trillion won, and operating profit was up 5.1 per cent to 32.2 billion won.

Despite the difficult business environment caused by the global economic downturn, Hyundai achieved better results than its rivals, Chang Tae Kyung, Hyundai's chief financial officer, was quoted as saying by the national Yonhap news agency.

Like other carmakers, Hyundai had to cut production as global demand slumped. Production was cut in its domestic plants by 25 to 30 per cent with the exception of the main Ulsan plant, which makes compact cars. In December, sales dropped by moderate 2.4 per cent to 219,000 units.

Hyundai did not give a prognosis for 2009, but Chan indicated that the company expected sales to pick up as Hyundai was likely to profit from rising demand for compact cars and the weak won. dpa