KIA Motors reported an 18% rise in quarterly net profit on Friday, boosted by strong sales of its compact models in Europe.

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.