Kia Motors reported a 59% drop in net profits to KRW133.68bn (US$118m) in the third quarter of 2020 from a net profit of KRW325.8bn a year earlier, after the company made substantial provisions for recalls and to overhaul its quality management processes.
Like sister company Hyundai Motor, the South Korean automaker forewarned last week of a one-off provision, of Kia KRW1.26trn, to cover car recall costs relating to the group's faulty Theta II engine and other associated costs.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Hyundai Motor Group last year reached a settlement with car owners in the USA over problems relating to the Theta II gasoline direct injection (GDi) engine, including engine stalls and non-collision fires.
The automaker said apart from the provisions, it overall business performance continued to improve in the third quarter, with revenues rising by 8.2% year-on-year to KRW16.3bn. Operating profits fell by 33% to KRW195.2bn.
Global sales were just slightly lower at 699,402 vehicles in the third quarter from 702,258 units a year earlier, with overseas sales down by 1.3% at 562,678 units while domestic sales rose by 3.2% to 136,724 units – driven by strong demand for the Carnival minivan, the Sorento SUV and K5 sedan.
Global sales in the first nine months of the year fell by 8.8% to 1,863,966 units from 2,043,780 a year earlier.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
