Kia Motors has reported a lower than forecast profit for the third quarter today, as a strike and weak demand in South Korea cut into its earnings.

South Korea's second-biggest carmaker said its profit rose 28% in the three months from July to September to 829 billion won ($755m).

Operating income reached 861 billion won, up 4% from a year earlier. Revenue rose 16% to 1.16 trillion won.

The results missed market forecasts as analysts had expected Kia to post more than 1 trillion won in net profit and operating income.

Kia's third-quarter net profit declined 24% from the previous quarter after a labour strike lowered production by 62,890 cars worth $94m.

Workers at Kia Motors, along with employees at Kia's bigger affiliate Hyundai Motor, staged walkouts starting July demanding higher wages and an end to overnight shifts. Kia and Hyundai both reached an agreement with their labour union in September but vehicle output took a hit.

Despite the strike, Kia posted sales growth during the first three quarters of this year. It sold 2.03 million cars between January and September, up 11% over a year earlier, it said.

While Hyundai Motor convinced investors that it will be able to outdo its annual sales target by ramping up output during the fourth quarter, Kia's statement showed the smaller carmaker may face challenges in meeting demand.

"The product disruption caused by the labour strike in the third quarter is expected to result in shortages in our inventory level around the world," Kia said.

Overseas sales will be challenged by the weak global economy and the strengthening local currency against the US dollar, which could raise prices of Kia vehicles overseas.