SEOUL: Hyundai Motor on Thursday posted a steep drop of more than 20 percent in fourth quarter profits as a strong won continued to blunt its price competitiveness against Japanese rivals.

Net profit for the October-December period was down 22.2 percent from a year ago at 1.65 trillion won ($1.51 billion), South Korea's largest automaker said in a statement.

Operating profit also tumbled 7.6 percent year-on-year to 1.88 trillion won, while sales rose 7.5 percent to 23.6 trillion won, it said.

The company, which along with its smaller affiliate Kia is the world's fifth-largest automaker, has for the past decade steadily expanded its presence in the global market including the US, nipping at the heels of Japanese giants like Toyota and Honda.

But it has struggled recently as a strong won and a weak yen has eroded its price competitiveness against Japanese rivals in overseas markets. The won last year hit its highest level against the yen since 2007.

Hyundai said it faced an uphill battle in 2015, as foreign carmakers seek to expand in the domestic Korean market and competition escalates overseas.

"It is believed the sales environment this year will continue to remain unfavorable," the company said, setting a worldwide sales target of 5.05 million vehicles.

The company sold 4.96 million vehicles in 2014, while operating profit for the whole year tumbled 9.2 percent to 7.5 trillion won — the lowest since 2010.