Kia Motors has reported a flat quarterly net profit as rising steel prices and weak local sales offset a jump in exports.
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Global steel prices, up 14% in the first half, have gnawed at Kia’s bottom line along with heavy marketing costs to give incentives to auto buyers in a sluggish domestic market, Reuters said.
Analysts, however, reportedly banked on better local sales for the second half as Kia should benefit from next month’s launch of a new model of compact sport utility vehicle.
Reuters said Kia earned a net profit of 186.4 billion won ($US159.6 million) for the three months ended June 30, unchanged from a year ago, as sales rose 14% to 3.9 trillion won.
Kia’s quarterly profit came one day after Hyundai Motor reported an 11 percent drop in second-quarter profit, pinched by higher steel prices and slow domestic sales, the report noted.
Like its domestic rivals, Kia has suffered a protracted slump in sales at home while enjoying solid demand in Europe and elsewhere, Reuters added.
