Kia Motors’ 2019 net up 58% as SUVs sell well
The fourth quarter was particularly strong.
Despite the popularity of the company’s SUVs, especially the Telluride and the Seltos, challenges remained in China and Latin America.
Between October and December last year, the company posted net profit of 346.4 billion won ($297 million), up 267.1 percent from 94 billion won posted in the same period a year earlier.
Operating profit was up 54.6 percent to 590.5 billion won from 382 billion won, while revenues increased around 19.5 percent on year to 16.1 trillion won.
Full-year operating profit jumped 73.6 percent to 2.01 trillion won, from 1.16 trillion won in 2018.
The net profit surged 58 percent on year to 1.83 trillion won, and total revenue was up 7.3 percent to 58.1 trillion won.
“Continued political and economic instability in some major regions resulted in difficult managerial conditions and sluggish overall market demand,” a Kia Motors investor relations spokesperson said in a conference call.
“Although the aggregate sales for all regions, including China, fell, earnings improved from better profits from selling more profitable new cars and favorable value of the won against the dollar.”
According to the Bank of Korea, the won traded at 1,175.81 to the dollar in the fourth quarter, significantly weaker than the 1,127.52 in the same period a year earlier.
If the value of local currency depreciates, Korean exports become more price competitive overseas and profits can increase.
During the fourth quarter 2019, Kia Motors sold a total of 728,296 units worldwide, down 1.4 percent on year. For the whole year, the company sold 2.77 million vehicles worldwide, also down 1.4 percent from a year earlier, which is in line with the global trend of falling demand for new cars.
Kia Motors outperformed the overall auto market as its SUVs did well in North America and India.
Kia Motors sold 45,000 Seltos small-size SUVs in the Indian market. The automaker also succeeded in the U.S. market with the popularity of the Telluride large-size SUV.
Its 2019 sales in China dropped 30.2 percent on year while the totals for Russia and Latin America fell 0.9 percent and 12.2 percent, respectively.
The automaker said that in 2020 it plans to continue building its SUV lineup in the global market by introducing new models and expanding production capacity for its best-selling models.
Kia Motors plans to roll out the new Sorento SUV in March and introduce a new version of the Carnival van by July.
To strengthen its competitiveness in the U.S. market, the company is expanding its Telluride production capacity from 80,000 units as of November to 100,000 by July.
It is also targeting to introduce the Seltos in the North American market while expanding eco-friendly vehicle options in Europe to meet tightening regulations.
The company projects sales to rise 4.9 percent in 2020 to 2.96 million units. Kia Motors shares rose 2.4 percent Wednesday.
BY KO JUN-TAE [email@example.com]