Kia has expressed confidence in maintaining its annual performance targets despite external uncertainties such as U.S. auto tariffs and rising raw material costs. The company plans to enhance profitability through increased hybrid vehicle sales while opting not to expand electric vehicle (EV) incentives in Europe.
Kim Seung-jun, Executive Vice President of Kia's Finance Division, stated during a conference call on July 24 following the second quarter earnings report, "We believe we can achieve our targets of 3.35 million wholesale sales, 3.31 million retail sales, and an operating profit of 10.2 trillion won set during our Investor Day earlier this year," adding, "We expect about 10% growth in the second half compared to last year."
Kia reported a record consolidated revenue of 33.037 trillion won for the second quarter, achieving both the highest revenue and the most sales in a single quarter. During this period, global wholesale sales reached 851,639 units, while retail sales totaled 839,000, marking increases of 4.5% and 5.8%, respectively, compared to the same period last year.
Kim noted, "While global automotive demand has decreased by 3.8% year-on-year, Kia's global sales have grown by about 6%, and our market share in the first half reached a record high of 4%. Sales are increasing evenly across most regions, not just in specific areas."
The EV sales incentives previously expanded in the European market were described as a strategic choice to secure market share. Kia increased incentives for its mid-range EV models, including EV2, EV3, EV4, and EV5, with average incentives exceeding 1,000 euros in Europe and about $400 per vehicle in the U.S.
Kim emphasized, "It was important to secure market share even if it meant sacrificing some profitability in EVs to compete with Chinese manufacturers. There were expectations for further incentive expansions in the second half, but that will not be the case."
Regarding concerns over declining profitability due to increased EV sales, he expressed confidence that the growth in hybrid sales would sufficiently offset this. In the second quarter, the share of domestic EV sales reached 24.5%, while in Europe, it rose to 35%, but hybrid sales are also increasing rapidly.
Kim stated, "Hybrids have about 1.5 times the profitability of internal combustion engines. Even as EV sales increase, the share of hybrids is also expanding, allowing us to maintain overall profitability."
Kia plans to increase production of the Telluride hybrid at its Georgia plant and to begin mass production of the Sportage hybrid at the Hyundai Motor Group Metaplant America (HMGMA) to boost sales. The company also anticipates that the impact of rising raw material prices, identified as a performance burden, will ease starting in May.
The future mobility business will proceed as scheduled. Kia confirmed that there will be no changes to the timelines for developing software-defined vehicles (SDVs) and autonomous driving technology. The company plans to unveil a concept vehicle next year, with the launch of SDVs expected in early 2028 and the completion of Level 2++ autonomous driving technology by the end of that year.
Additionally, Kim mentioned the data center planned for construction in Saemangeum, North Jeolla Province, stating, "It will be a key asset for collecting and training data for autonomous driving and robotics. It will be operated as a joint asset of the group, not just Kia."
* This article has been translated by AI.
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