* Q3 net profit 2.3 trln won vs consensus of 2.17 trln won
* China, Brazil sales strong on new factories
* Aging models, tight supply, competition crimp U.S., Koreasales
* Shares end down 1.9 pct in rising market
By Hyunjoo Jin
SEOUL, Oct 24 (Reuters) - South Korean auto giant HyundaiMotor Co posted a modest profit gain following thirdconsecutive quarters of decline as strong sales in China andBrazil countered lacklustre performances at home and in theUnited States.
The 3.9 percent year-on-year growth in the quarter endedSeptember puts Hyundai Motor on a recovery track, althoughrising competition and a firming local currency are obstaclesthat it would still have to overcome.
Hyundai Motor, once a stellar performer in the global autoindustry, has seen its U.S. market share shrink as a weaker yen gives Japanese cars a leg-up. The South Korean firm isalso being squeezed by the growing popularity of BMW and Volkswagen models in its home market in the wakeof bilateral trade deals.
Hyundai Motor, the world's fifth-biggest carmaker along withaffiliate Kia Motors Corp, said on Thursday netprofit rose to 2.3 trillion won ($2.18 billion) inJuly-September. That was slightly above an average forecast of2.17 trillion won, according to Thomson Reuters I/B/E/S.
Sales were helped by increased output in Brazil and Chinaafter Hyundai Motor set up new factories there. It alsobenefited from anti-Japan sentiment that broke out last year inChina, the world's biggest auto market, after a diplomatic rowwith Japan over disputed islands.
Analysts expect Hyundai Motor's earnings to rebound in thefourth quarter. Its profit a year earlier was hammered by acostly recall in the United States.
That rebound will set the stage for a moderate recovery nextyear driven by new models such as Sonata and the Genesis. ButHyundai Motor warned that uncertainties in the global economycould still spoil the show.
"The global vehicle market will grow less than expected inthe fourth quarter, because of a delay in the recovery of U.S,and other advanced economies, and concerns about slowing demandin emerging markets," Hyundai Motor said in a statement.
Hyundai Motor has also been knocked by unfavourable currencymovements. The South Korean won has strengthened about 13percent against the yen so far this year, giving Japanese rivalsa bigger competitive edge.
Hyundai Motor increased sales incentives in the UnitedStates and South Korea in the third quarter to woo customersaway from rivals and to boost demand for its aging models,analysts say.
U.S. incentive spending jumped 76 percent to $1,926 per salein September from a year earlier, although that is lower thanthe industry average of $2,363 per vehicle, according to autoinformation provider Edmunds.com.
Hyundai plans to launch a new, significantly redesignedversion of its Genesis large car and a revamped Sonata mid-sizedsedan in the U.S. next year.
"With important 2014 redesigns of the Genesis and Sonatacoming, Hyundai can expect a reduction in incentives,"Edmunds.com analyst Jeremy Acevedo said in an emailed statementto Reuters.
Hyundai Motor shares ended down 1.9 percent to 253,500 wonin Seoul trading on Thursday after jumping 16 percent over thepast three months on hopes the upcoming models Genesis andSonata may help revive earnings growth.
Brokerages such as Macquarie Securities and BNP Paribas thismonth raised the target share price of Hyundai Motor.
Total vehicle shipments climbed 11 percent to 1.1 million inthe third quarter as labour strikes at home were offset byincreased production in China and Brazil.
Hyundai Motor will try to exceed its goal of raising globalvehicle sales by 6 percent to 4.66 million vehicles this year,Kim said.
Hyundai Motor's labour union in South Korea staged partialstrikes in August and September during wage talks, but causedless production loss compared with last year.
The union plans to select a new leader in early November toreplace the current hardline chief, who last year led theautomaker's first strike in four years.
Next year, Hyundai Motor's production capacity will growonly 5.6 percent to 4.91 million vehicles, Kim Yeung-tae, vicepresident of Hyundai Motor, said during a conference call onThursday. It reiterated that there is no plan to build newfactories.
- Company Earnings