Kia Motors reported an 18% rise in quarterly net profit on Friday, boosted by strong sales of its compact models in Europe.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Reuters noted that, like domestic rivals, Kia has suffered a protracted slump in local sales, crippled by weak consumption after a nationwide credit card binge went sour, while enjoying solid foreign demand in Europe and elsewhere.
Kia, an affiliate of Hyundai Motor, posted a net profit of $US143.1 million (167.6 billion won) for the first quarter ended March 31, against a profit of 141.6 billion won a year ago, as sales rose 13% to 3.38 trillion won.
“Domestic demand would be better in the second quarter than in the first quarter and exports momentum should continue,” Song Sang-hoon, an auto analyst at Hyundai Securities, told the news agency.
Lee Ju-an, a fund manager at Daehan Investment Trust Management, reportedly backed Song’s view, suggesting investors buy Kia’s stock.
“We are overweight on Kia. If you bank on a local recovery, it’s a time to amass some representative retail stocks such as autos or banks,” Lee told Reuters.
The report said soaring export growth, new launches and cost savings from a sharing of basic car platforms with Hyundai have prompted analysts to ramp up target prices for shares in Kia, which controls 23% of the country’s car market.
Reuters noted that Kia’s earnings outpaced Hyundai Motor’s – the market leader reported an 11% rise in quarterly profit but heavy discounts to sell an ageing US model line-up hit operating profits.
Kia exports jumped 34.3% to 160,835 units in the first quarter, offsetting a 31.6% drop in local sales – total sales were 221,298 units, up 6.3% from a year ago.
