"Record High in Panga"… Kia's 1Q Operating Profit Increased by 50% (Update)

Kia Yangjae Headquarters

[Asia Economy Reporter Choi Dae-yeol] Kia announced on the 25th that its operating profit for the first quarter of this year reached 1.6065 trillion KRW (IFRS consolidated basis), a 49.2% increase compared to the same period last year.

According to the company's first-quarter business performance announced on the same day, sales amounted to 18.3572 trillion KRW, a 10.7% increase from the same period last year. Ordinary profit rose 15.1% to 1.518 trillion KRW during the same period. Net profit for the period was 1.0326 trillion KRW, a slight decrease of 0.2%.

A Kia official explained, "Although some production was limited due to semiconductor supply shortages and parts supply disruptions caused by worsening international situations, resulting in a decrease in wholesale sales, we secured a sales structure focused on high-profit vehicles and reduced incentives, implementing a 'getting the right price' pricing policy that raised the average selling price." He added, "Favorable exchange rate effects further boosted sales and profitability."

This performance is notable as it was achieved despite an overall slight decline in sales. First-quarter sales in the domestic market were 121,664 units, down 6.5% compared to the same period last year. Overseas sales increased by 0.7% to 564,075 units during the same period. Overall, total sales were 685,739 units, a 0.6% decrease.

Although production and sales slowed, sales revenue increased due to a higher proportion of high-priced models and relatively expensive recreational vehicles (RVs). The RV sales ratio reached 61.3%, the highest level ever recorded. Additionally, exchange rate effects contributed. As the supply-side market dominance intensified due to production disruptions caused by parts shortages, the company implemented a pricing policy focused on getting the right price by reducing incentives. As a result, the average selling price also reached an all-time high, the company reported. The operating profit margin for the first quarter rose by 2.3 percentage points to 8.8%, the highest level since the second quarter of 2012.

Sales of eco-friendly vehicles also increased. First-quarter eco-friendly vehicle sales totaled 110,430 units, a 75.2% increase compared to the same period last year. The share of eco-friendly vehicle sales in total sales was 15.8%, up 6.9 percentage points during the same period. Hybrid vehicles accounted for 51,025 units, plug-in hybrids for 15,868 units, and electric vehicles for 43,150 units.

By type, hybrids consisting of Niro, Sorento, and Sportage recorded 51,025 units (a 68.7% increase year-on-year); plug-in hybrids centered on Niro, Ceed, and Sorento recorded 15,868 units (a 4.3% increase year-on-year); and electric vehicles such as the EV6 and Niro EV recorded 43,150 units (a 148.9% increase year-on-year).

Performance was strong in Western Europe, considered an advanced market for electric vehicles. According to research by global automotive industry research firm JATO, electric vehicle sales in Western Europe from January to February this year reached 14,269 units, accounting for an 8.7% market share. Among electric vehicle brands, Kia ranked second with 10.0%, following Tesla. This is a significant jump from sixth place last year.

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