Kia Motors Surpasses 2 Trillion Won Operating Profit Last Year... 'Telluride and Seltos Effect' (Update)

Operating Profit of 2.0097 Trillion KRW in 2019... 73.6% Increase Compared to Previous Year

Hyundai Kia Motors Yangjae Office Building (Photo by Yonhap News)

[Asia Economy Reporter Kim Ji-hee] Kia Motors has recovered its annual operating profit to the 2 trillion KRW level for the first time in three years.

On the 22nd, Kia Motors announced through its annual business performance conference call that its operating profit for 2019 reached 2.0097 trillion KRW, a 73.6% increase compared to the previous year. Operating profit at the 2 trillion KRW level was achieved for the first time in three years since 2016.

Thanks to mix improvement from expanded sales of high-profit models and the launch of competitive new vehicles, sales revenue was recorded at 58.146 trillion KRW, a 7.3% increase from the previous year. During the same period, the operating profit margin rose by 1.4 percentage points to 3.5%.

A Kia Motors official said, "Despite quality costs incurred in the third quarter, operating profit surpassed 2 trillion KRW due to overall profitability fundamentals improvement such as sales mix improvement, inventory stabilization, and incentive reduction, as well as favorable exchange rate conditions and the effect of the first quarter's reversal of ordinary wages. In particular, the Telluride, which successfully settled in the U.S. large SUV market with nearly 60,000 units sold recently, greatly contributed to Kia's sales expansion and profitability enhancement."

It is especially notable that operating profit increased significantly despite a decrease in annual sales last year. In 2019, Kia Motors sold 2,772,076 units globally, a 1.4% decrease compared to the previous year. Sales declined both domestically and overseas.

However, sales somewhat recovered in the fourth quarter, largely offsetting the sluggish performance in the first half. In the fourth quarter of last year, Kia's global sales recorded 728,296 units, a 1.4% decrease from the previous year. Domestic sales increased by 5.8%, while overseas sales decreased by 3.1%. Major new models launched in the domestic market in the second half, such as the Seltos, K7 and the facelifted Mohave, and the new K5, drove sales.

In overseas markets, sales expansion in major markets such as the U.S. and Europe, along with successful market entry in India, minimized the impact of sluggish demand in China, Russia, and Latin America. Excluding China, global sales in the fourth quarter reached 669,096 units, up about 10% compared to the previous year.

Accordingly, fourth-quarter sales revenue increased by 19.5% year-on-year to 16.1055 trillion KRW, and operating profit rose by 54.6% to 590.5 billion KRW. The operating profit margin also slightly increased to 3.7%.

A Kia Motors official explained, "We will do our best to maintain the performance improvement trend by continuing strong sales of key models such as the Telluride and Seltos this year, while focusing on expanding sales of the new K5 in major markets and the successful launch of the new Sorento and Carnival."

This content was produced with the assistance of AI translation services.