to leave a comment.
Sales increased by 5.3% to 29.5019 trillion won... Quarter's highest driven by high-profit vehicle sales
Only major automaker to see sales growth... Eco-friendly vehicle sales account for 29.7%
Kia's operating profit in the first quarter of this year decreased by more than 20% compared to the same period last year, due to the impact of US tariffs and the Middle East war.
Instead, Kia increased its sales and market share at a time when most major automakers saw their sales decline due to weakening global demand.
During its Q1 earnings conference call held on the 24th, Kia announced that its consolidated operating profit for Q1 this year was provisionally tallied at 2.2051 trillion won, a 26.7% decrease from the same period last year.
Sales increased by 5.3% from the same period last year to 29.5019 trillion won, marking the highest quarterly sales ever.
Net profit decreased by 23.5% to 1.8302 trillion won. The operating profit margin was 7.5%.
Kia explained that its profitability was hit as the impact of US tariffs on imported finished vehicles was fully reflected in Q1 this year. The US tariff cost compiled by Kia was 755 billion won.
In addition, increased incentives due to intensified competition in the North American and European markets, and an increase in warranty provisions due to a sharp rise in the year-end exchange rate also negatively affected operating profit. As a result, the selling and administrative expense ratio rose by 1.2 percentage points (p) from the same period last year to 12.2%.
However, Kia added that sales recorded their highest quarterly figure due to improved product mix centered on high-profit models and favorable exchange rate effects.
Global sales (wholesale basis) totaled 779,741 units, a 0.9% increase compared to the same period last year. This includes 141,513 units domestically and 638,228 units overseas.
Considering that most major global automakers, including Hyundai Motor, experienced sales declines, the automotive industry generally evaluates this as a strong performance.
In the domestic market (retail basis), sales increased by 5.2%, driven by electric vehicles such as EV3, EV5, and PV5, following the implementation of new year EV subsidies.
Overseas market sales increased by 3.7%, recovering from supply chain disruptions due to the Strait of Hormuz blockade by shifting sales to other regions and supplying North American hybrid models such as the new Telluride.
As a result, global market share increased by 0.5 percentage points (p) from the same period last year to 4.1%. This marks the first quarter that Kia's global market share has exceeded 4%.
In Q1 this year, Kia's eco-friendly vehicle sales totaled 232,000 units, a 33.1% increase from the same period last year.
By type, hybrid vehicles increased by 32.1% to 138,000 units, and electric vehicles increased by 54.1% to 86,000 units.
Accordingly, the proportion of eco-friendly vehicles in total sales increased to 29.7%, up 6.6 percentage points from 23.1% in the same period last year.
The proportion of eco-friendly vehicles by major market was ▲ 59.3% in Korea (up 16.6%p) ▲ 23.0% in the US (up 4.6%p) ▲ 52.4% in Western Europe (up 8.5%p).
Kia anticipates that uncertain business conditions, including geopolitical risks, intensified competition, and changes in external circumstances, will continue this year.
In response, the company plans to focus on fundamental profitability defense through product mix and ASP improvements.
In the Korean market, Kia will strengthen its eco-friendly vehicle-centered sales strategy, including expanding EV4, EV5, PV5, and launching the Seltos Hybrid.
In the US market, Kia plans to increase sales of high-profit models such as Telluride and Carnival, and strengthen its hybrid lineup to enhance market dominance.
In the European market, Kia plans to solidify its EV leadership by building a full EV lineup, including EV2, EV3, EV4, and EV5.
A Kia official said, "Although short-term cost increase factors such as US tariffs occurred, global market share expansion and qualitative growth centered on eco-friendly vehicles are continuing. We will maintain profitability through improving the sales mix focused on high-value-added vehicles and efforts to reduce costs."
Newsletter
Get key news delivered to your email every morning
to leave a comment.