Hyundai Motor reported a third-quarter operating profit of W288.9 billion on Thursday, just one fourth of what it made a year ago (US$1=W1,138). Direct comparison is difficult due to changed accounting methods since 2010, but the operating profit looks similar to what the automaker made 20 years ago.

Hyundai's operating margin stood at a paltry 1.2 percent, which is even worse than the 4.2 percent at the height of the Asian financial crisis in 1998.

Analysts had expected Hyundai to achieve an operating profit of around W800 billion, and the earnings shock sent Hyundai shares tumbling six percent on Thursday.

A combination of factors worked against the auto giant, including weak sales in the U.S. and China, currency woes in emerging countries and a failed marketing strategy as well as the deteriorating economy here.

Hyundai's decline has huge knock-on effects for the Korean economy. The carmaker takes up a whopping 80 percent of domestic automobile production and impacts around 8,000 parts suppliers and Korea's automotive industry as a whole, which employs 400,000 workers and accounts for eight percent of the nation's exports.

Hyundai's troubles contrast sharply with strong sales at rival automakers abroad. GM, Nissan, Renault, Toyota and Volkswagen all achieved operating margins of more than five percent in the first six months of this year.

Yun Chang-hyun at the University of Seoul said, "The car industry is responsible for a huge proportion of hiring, much more so than shipbuilding and construction, and if it sneezes, Korea's entire economy catches a cold."

A company spokesman said, "We've had all adverse factors piling up simultaneously."