Kia Motors’ second quarter earnings nearly quadrupled as government tax incentives and rising overseas demand for small cars boosted sales.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Net profit reached 347 billion won (US$277m) in the April-June period, compared with a profit of 85.9 billion won year earlier, the company said in a regulatory filing.
Sales increased 11.5 percent to 4.68 trillion won over the cited period, and operating income surged 182 percent to 330 billion won, it said.
Kia delivered 428,615 vehicles in the second quarter. Kia Motors said its second-quarter domestic sales increased 42 percent year-on-year, but overseas sales declined 7.9 percent over last year.
“Despite a severe downturn in the global market, Kia Motors managed to generate profit on the back of tax incentives and a weaker local currency,” the company said in a statement.
Kia Motors said its domestic market share rose to 31 percent in the second quarter from 25 percent at the end of last year.
Kia also said that its global market share rose to 2.5 percent in the second quarter from 2.1 percent a year earlier.
Kia Motors’ first-half net profit reached 383 billion won, and its operating income amounted to 200 billion won. Its sales in the first six months of the year reached 8.17 trillion won.
The automaker sold a total of 509,784 vehicles in the January-June period, down 2.7 percent from a year earlier.
Domestic sales in the first half jumped 25 percent from a year earlier to 191,616 units, while its overseas sales plunged 14 percent to 318,000 units.
However, Kia said the ongoing strike scheduled to continue through the end of the month could cost up to 1 trillion won in lost production.
Unionised workers launched a strike on Tuesday to demand higher wages and better working conditions.
The union said Kia workers may lay down their tools for four hours every day through Aug. 31 if their demands are not met.
Kia aims to boost global unit sales by around 7 percent this year with new models and aggressive marketing.
Kia is aiming to sell 1.5 million vehicles in 2009, compared to 1.4 million units last year, James Lee, the company’s chief financial officer, told reporters and analysts.
