Investors are coming back to Hyundai Motor as a weakening won and strong sales of new cars at home in the third quarter give shares of the nation’s top automaker a chance to bottom out from the yearlong slump. 

According to stock market operator Korea Exchange, shares of the carmaker rose about 27 percent for the past three months until last Friday when they closed at 167,000 won ($141.17).

They have been in a slump for the past year since the carmaker sealed an office property deal worth $10 billion in September 2014 that was perceived as bad value.

The worsening business environment, including a strong won, China’s economic slowdown and the popularity of foreign car brands in the first half of this year, dealt a blow to corporate earnings, which further dragged the company’s stock price down.

“Business conditions surrounding the carmaker, however, have started picking up in the past few months. Most of all, the weakening won and strong demand for new cars at home are giving the carmaker relief and an impetus to seek growth gain again,” said Ko Tae-bong, a stock analyst at HI Investment & Securities.

He said that the recent massive recall by Hyundai Motor in the U.S. would not sap the firm’s momentum. Last Friday, Hyundai Motor America recalled nearly half a million Sonata sedans, the carmaker’s best-selling model in the U.S., due to an engine defect.

The nation’s top car manufacturer saw its sales grow 1.2 percent on-year last month thanks to robust demand from the domestic market.

Out of 94,861 vehicles sold last month, domestic sales gained 8.7 percent to 51,954 units, while overseas shipments edged up 0.2 percent to 342,907 units, the company said in a press release. 

The  all-new Avante subcompact, which debuted here in early September, was one of the biggest contributors to the sales performance. The number of Avante units sold last month was 8,583.

Many analysts forecast the upward trend in the stock price of Hyundai Motor would stretch into the fourth quarter.

Some of them said the company could benefit from Volkswagen’s emissions scandal in sales overseas and at home. “It seems inevitable that the image of the German mass-market brands will be tarnished, which makes customers look for alternatives in the same segment, such as Hyundai Motor cars,” Lee Sang-hyun, an analyst at IBK Securities, wrote in a report.

For the mid-and long-term growth, however, it is critical for Hyundai Motor to prove it can sustain profitable growth in major overseas markets such as China and to deal with chronic internal labor issues, market watchers said.

The Korean carmaker sold 90,108 cars in China last month, down 5.4 percent from a year earlier, according to the company data.

China, along with the United States, is a major overseas market for Hyundai and so a sales slump in China could weigh on the automotive group.

The prolonged labor dispute might haunt Hyundai Motor for the remaining months. Additional labor conflicts loom large at the site as the union members of the carmaker failed to reach an agreement with the company for the 2015 pay and working conditions last month.

“A lack of a strategic approach to long-term growth is another concern ahead of the Korean automaker in a time when the auto industry is in transition to a green economy,” an industry insider added.

By Seo Jee-yeon (jyseo@heraldcorp.com)