Kia Motors posts strong earnings on RV sales
Korea’s No. 2 carmaker posted an operating profit of 1.4 trillion won from January to June, a 20.8 percent year-on-year surge, the automaker said Wednesday. Meanwhile, Hyundai Motor reported a 7 percent year-on-year decrease in operating profit a day earlier.
Kia Motors also posted a three-year highest quarterly operating profit of 770.9 billion won. “With the strong dollar as well as new car effects with our K7 model and strong RV sales, we were able to notch up in revenue,” a Kia Motors spokesperson said.
Revenue from January to June increased 14.7 percent over last year to 27 trillion won.
Although sales volume tumbled from 1.5 million units to 1.4 million this year, the rising popularity of RVs or recreational vehicles, which includes minivans, sports utility vehicles and wagons, played a vital role in lifting Kia. RVs are more expensive than other vehicles.
Globally, the number of RV models sold increased from 34.1 percent to 38.1 of the entire sales volume. The release of new models also contributed to Kia’s results.
The large K7 sedan released in January and electric car Niro, which was released in March, helped Kia sell 275,742 cars domestically, 13.9 percent more than last year’s same period.
In the North American market, SUV model Soul and midsize sedan K3 showed an upsurge in sales, leading to 5.6 percent growth compared to the same period last year.
However, a sluggish economy in emerging markets gnawed at Kia’s global sales volume. The number of cars manufactured here but exported overseas shrank 17.6 percent.
Although the global market is projected to remain sluggish, Kia Motors plans to release eco-friendly models and expand its RV line-up.
“We are going to boost our eco-friendly image by releasing hybrid and plug-in hybrid models Niro and Optima in the United States and Europe in the third quarter,” Han Chun-soo, Kia’s chief financial officer, said Wednesday.
In Korea, Kia is planning to release the Morning compact car and a hybrid version of the K7 large sedan.
“The latter half of this year will not be good for Kia Motors, as both domestic and overseas markets will show demand shrinkage,” said Kim Joon-sung, an analyst at Meritz Securities. “Defending the domestic market would be the first and necessary step to continue its favorable sales trend.”
BY JIN EUN-SOO [email@example.com]
More in Industry
As profits boom, big Korean companies reduce head counts
Hyundai Heavy confirms bid to buy stake in Doosan Infracore
It's a wrap
Joining hands for MOU