SEOUL (Reuters) – Hyundai Motor Co’s <005380.KS> quarterly net profit slumped 14 percent, missing estimates by a large margin, as the South Korean automaker continues to struggle with lacklustre sales in its key markets, China and the United States.

The disappointing results, coming at a time when the global auto industry is bracing for potential U.S. import tariffs, paint a gloomy outlook for Hyundai that is trying to revive its sales in the United States with its recent launch of a new Santa Fe sport utility vehicle (SUV).

Hyundai, which together with affiliate Kia Motors Corp <000270.KS> is the world’s fifth-biggest automaker, on Thursday reported a second-quarter net profit of 701 billion won ($626.79 million), versus 817 billion won a year prior. Consensus was for of 972 billion won, according to 17 estimates by Thomson Reuters I/B/E/S.

Hyundai’s operating profit slumped 29 percent to 951 billion won and sales rose 2 percent to 24.71 trillion won.

It cut production at its U.S. factory and exported fewer vehicles to the United States over the quarter to whittle down inventories of unpopular sedans.

For years, U.S. consumers have been moving away from traditional passenger cars in favour of larger SUVs and crossovers – a shift Hyundai has been slow to respond to.

The United States in May launched an investigation into whether imported vehicles pose a national security threat and President Donald Trump has repeatedly called for tariffs.

On Wednesday, President Trump, easing the threat of a transatlantic trade war, agreed to refrain from imposing car tariffs with the European Union.

In China, Hyundai’s biggest market, retail sales fell 3 percent in January-June compared with the same period a year earlier.

The South Korean automaker has been trying to restore sales in China following a spat between the countries over Seoul’s deployment of an anti-missile system.

It launched a Chinese version of its small SUV Kona after diplomatic ties normalised, but recovery has been tepid with Hyundai’s share of the market dropping this year.

On Wednesday, the automaker said it had replaced its Chinese chief after less than one year.

($1 = 1,118.4000 won)

(Reporting by Hyunjoo JinEditing by Himani Sarkar)