Kia Posts Resilient Q3 Operating Profit of 1.3 Trillion Won Despite Semiconductor Shortage

Sales Volume Decreased by 2.1% but Offset by Increased Sales of High-Value Vehicles like RVs

[Asia Economy Reporter Yoo Je-hoon] Kia managed to perform well in the third quarter by expanding sales and operating profit despite the adverse impact of the vehicle semiconductor supply shortage.

Kia announced on the 27th that its preliminary figures for the third quarter showed sales of 17.7528 trillion KRW and operating profit of 1.327 trillion KRW. These figures represent increases of 8.8% and 579.7%, respectively, compared to the same period last year.

Kia's third-quarter sales volume stood at 684,413 units, a 2.1% decrease from the previous year. In the domestic market, despite the new car effect of key recreational vehicles (RVs), production disruptions caused by the semiconductor supply shortage continued, resulting in a decline of 8.6% to 124,964 units.

Overseas, Kia showed strong sales growth in regions such as Europe, India, the Middle East, and Latin America, but the semiconductor supply shortage in the core U.S. market led to inventory shortages, causing overall sales volume to decrease by 0.6% to 559,449 units.

However, both sales and operating profit increased due to an improved sales mix focused on high value-added models such as RVs. In particular, increased sales of high-profit new models like the Sorento, Carnival, and Seltos significantly contributed to profitability. In fact, Kia's RV sales ratio (excluding China) in the third quarter rose by 1.1% year-on-year to 58.7%.

Meanwhile, Kia expects demand recovery to continue due to the base effect from the COVID-19 pandemic, but production disruptions and inventory shortages caused by the global semiconductor supply shortage may persist. The semiconductor shortage is likely to continue into the fourth quarter and may become prolonged, and Kia anticipates that it will take considerable time to normalize automobile production.

A Kia official stated, "We will prioritize securing liquidity by mobilizing company-wide capabilities to secure parts supply, continuously improving the sales mix, and managing external risks," adding, "In the mid to long term, we plan to secure profitability by expanding production and sales of electrified models and to concretize new revenue and new business areas such as software and services."

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