'Hyungmanhan Au' Kia

Q2 Profit Margin... 10.2%
July Sales Volume Highest Since 2014

[Asia Economy Reporter Hyunseok Yoo] Despite concerns over raw materials and semiconductor supply, Hyundai Motor and Kia are recording strong performances, with Kia, the younger sibling, showing rapid growth. This is due to steady growth in recreational vehicles (RVs) and eco-friendly vehicles, leading to fast expansion in the global market.

According to the completed car industry on the 4th, Kia sold a total of 257,903 units domestically and overseas last month. In the domestic market, a total of 51,355 units were sold, marking the first time since 2005 that sales exceeded 50,000 units by July of the year. Overseas sales reached 206,548 units, the highest since 2014.

Hyundai Motor also achieved a 4.0% increase in sales last month compared to the previous year, but compared to Kia’s 6.3% growth during the same period, the younger sibling’s sales volume increased more than the elder’s.

Rapid growth is also evident in performance. Kia posted record-breaking results in the second quarter of this year, achieving sales of 21.876 trillion KRW and operating profit of 2.2341 trillion KRW. Sales increased by 19.3% and operating profit by 50.2% compared to the same period last year. This is the first time in Kia’s history that quarterly operating profit exceeded 2 trillion KRW.

In particular, Kia’s profitability is improving rapidly. The operating profit margin, which was only 2.1% in 2018, was still just 3.5% in 2019 but rose to 7.3% last year. However, in the second quarter of this year, it recorded 10.2%, surpassing the previous best of 9.8% in the second quarter of 2012 after 10 years. It also exceeded Hyundai Motor’s second-quarter operating profit margin of 8.3%.

The increase in sales of RVs and eco-friendly vehicles is cited as the main reason behind Kia’s growth. In the second quarter, RVs accounted for 65.4% of Kia’s total sales, an increase of 8.9 percentage points compared to the same period last year. Especially this year, until last month, 167,920 RVs were sold domestically, which is 57.76% more than the 106,436 passenger cars sold.

Additionally, the proportion of eco-friendly vehicles is rapidly increasing. As of last month, domestic sales of eco-friendly vehicles this year totaled 103,241 units, a 96.7% increase compared to last year’s cumulative 52,480 units. This is attributed to the full reflection of sales of the EV6, Niro Hybrid (HEV), and Sportage HEV.

Industry experts expect Kia’s growth trend to continue. Kia is establishing brand identity with differentiated design from Hyundai Motor, and future achievements are anticipated in purpose-built vehicles (PBV) as well. Professor Kim Pilsoo of Daelim University’s Department of Automotive Studies said, "Kia can be seen as having succeeded in creating its own unique color," adding, "Since it is gaining popularity in RVs and eco-friendly vehicles, good results are coming out." He continued, "Kia is aiming for purpose-built vehicles (PBV), and since this market is expected to grow, expectations for the future are also high."

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