Kia achieved record sales and the highest quarterly sales figures in its history in the second quarter of this year, driven by increased sales of electric vehicles (EVs) and hybrid vehicles (HEVs). However, operating profit saw a slight decline due to U.S. automotive tariffs and expanded sales incentives.
On July 24, Kia announced in a regulatory filing that its consolidated revenue for the second quarter reached 33.037 trillion won, with an operating profit of 2.6285 trillion won. This represents a 12.6% decrease in revenue and a 4.9% drop in operating profit compared to the same period last year. The operating profit margin fell to 8%, down 1.4 percentage points from the previous year, although it has shown improvement for three consecutive quarters since hitting a low of 5.1% in the third quarter of last year.
Sales figures also set a new record. Global wholesale sales in the second quarter totaled 851,639 units, a 4.5% increase from the same period last year. Domestic sales accounted for 154,816 units, while overseas sales reached 696,823 units. Global retail sales also rose to 839,000 units, up 5.8% year-on-year.
Kia explained that despite a decline in global automotive market demand due to geopolitical instability in the Middle East and reduced demand in the Chinese market, it was able to increase sales by expanding its electrified model lineup and benefiting from new vehicle launches.
In South Korea, sales of electric vehicles such as the EV3, EV5, and PV5 increased by 8.6% compared to the previous year. In the U.S., strong sales of SUVs like the Telluride, Sportage, and Sorento contributed to a 2.8% increase. In Western Europe, new models like the EV2, EV4, EV5, and PV5 led to a 12.9% increase, significantly outpacing the market growth rate of 4.8%.
Thanks to strong sales, Kia's global market share expanded to 4.0% in the second quarter, up from 3.7% in the same period last year. The first half of the year also recorded the highest market share to date.
The increase in revenue was largely driven by expanded sales of HEVs and EVs in the U.S. and Europe, which improved the average selling price (ASP). However, operating profit was pressured by increased sales incentives to compete with Chinese electric vehicle manufacturers in the domestic and Western European markets, as well as rising provisions for sales guarantees due to the depreciation of the won. The cost of sales ratio rose to 81.7%, an increase of 1.7 percentage points from the previous year, while the selling and administrative expense ratio improved by 0.3 percentage points to 10.3%.
Sales of electrified vehicles also saw significant growth. In the second quarter, sales of electrified vehicles reached 296,000 units, a 60% increase compared to the previous year, accounting for 35.3% of total sales, an increase of 11.9 percentage points.
Sales of EVs surged to 110,000 units, an 88.4% increase, driven by strong sales of the EV2, EV4, EV5, and the first purpose-built vehicle (PBV), the PV5. Domestic EV sales rose by 123.4%, while sales in Western Europe increased by 101.5%.
Sales of hybrids also increased by 61% to 178,000 units. In particular, in the U.S., the launch of the Telluride hybrid and the Seltos hybrid contributed to a 151.6% increase in HEV sales, which accounted for 29.6% of total sales.
Kia anticipates that it can achieve its annual performance goals in the second half of the year, supported by the effects of new vehicle launches and growing demand for electrification. In South Korea, it plans to expand sales of the EV3, EV5, and PV5.
In the U.S. market, the flagship SUV Telluride (including hybrid models) will see an increase in annual production capacity to enhance profitability. The Sportage hybrid, the first Kia model produced at the Hyundai Motor Group Metaplant America (HMGMA), will begin deliveries in the second half of the year. Additionally, the Mexico-made EV3 is set to launch in the U.S. later this year.
In Europe, local production of the EV2 and EV4 will maximize the price competitiveness of new mass-market EVs. Kia plans to strengthen its brand competitiveness in the commercial vehicle market through the PV5. The Seltos hybrid and K4 hybrid will be launched locally as HEVs. In emerging markets, including India and Latin America, Kia will continue to implement locally tailored strategic models and expand supply volumes.
Jung Seong-guk, Executive Vice President of Kia's IR and Strategic Investment Division, stated, "We will maintain robust profit resilience through improvements in our sales mix focused on high-value vehicles and various cost reduction efforts."
* This article has been translated by AI.
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