Korean Media: Kia's Third Quarter Sales Reach New Highs, but Profits Halved!
On November 24, Korean media outlet "Edaily" published an article stating that although Kia Motor achieved record-high sales in the third quarter of this year, its operating profit fell by half due to high tariffs in the United States. With the impact of the 25% tariff in the United States officially beginning, it has lost over 1.2 trillion South Korean won, leading to a decline in profitability. Kia expects that profitability will improve from the fourth quarter onwards, driven by enhanced competitiveness in electric vehicle sales and stronger-than-expected demand for U.S. industries.
Kia Motor recently announced that its consolidated operating profit in the third quarter of this year decreased by 49.2% to 1.4622 trillion South Korean won. At the same time, sales increased by 8.2% to 28.6861 trillion South Korean won. Net profit for the period fell by 37.3% to 1.4225 trillion South Korean won, with an operating profit margin of 5.1%. Although sales in the third quarter reached a new historical high, mainly due to increased sales, especially SUV sales growth and higher average selling prices, the operating profit was still about 30% lower than market expectations.
The biggest blow to Kia's operating profit came from the 25% tariff imposed in April in the United States. Affected by the tariff, the proportion of sales costs to sales in the third quarter rose by 4.3 percentage points to 81.1%, compared to 76.8% in the same period last year. Kia explained, "Due to the U.S. tariff, we incurred expenses of 1.234 trillion South Korean won in the third quarter." Kia expects that with the conclusion of the Korea-U.S. trade agreement, the U.S. tariff has been reduced to 15%, but its impact will begin to be reflected in December.
Looking at Kia Motor's vehicle sales in the third quarter, global market sales were 785,137 units, an increase of 2.8% year-on-year. Domestic market sales in South Korea were 138,009 units, up 10.2% year-on-year, and overseas market sales were 647,128 units, up 1.4% year-on-year.
Overseas, demand in North America continued to grow, mainly due to strong demand for hybrid electric vehicles in the United States. Sales in emerging markets such as Asia-Pacific and Latin America also continued to grow. However, despite strong EV3 sales, sales in the European market declined due to the temporary production adjustments caused by the transition to electrification at the Slovakia factory and the suspension of some models.
Original: www.toutiao.com/article/1849674587611339/
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