Kia Motors' third-quarter operating profit increased from a year earlier, helped by the impact of lower U.S. tariffs. However, its operating margin remained in the 5 percent range due to rising raw material prices, prolonged conflicts in the Middle East and increased sales incentives.
Kia said Friday that it recorded Q3 revenue of 31.5974 trillion won and an operating profit of 1.8183 trillion won on a consolidated basis. These figures increased by 10.1% and 24.3%, respectively, compared to the same period last year.
The operating profit margin was 5.8%, and net income for the period was 1.2855 trillion won. Wholesale sales volume rose by 7.9% to 847,355 units. The revenue increase was driven by a rise in average selling prices due to increased sales of HYBE (Hybrid) vehicles and electric vehicles in the U.S. and Europe.
The increase in operating profit reflected a base effect of approximately 530 billion won resulting from the reduction of the U.S. auto tariff rate from 25% to 15%. A volume effect of 442 billion won due to increased sales and an exchange rate effect of 529 billion won were also added. The average won/dollar exchange rate in Q3 was 1,423 won, up from 1,385 won in Q3 last year.
The market environment was not easy. Profits decreased by approximately 570 billion won due to rising raw material prices (368 billion won) and the aftermath of Middle East conflicts (209 billion won). These factors acted to lower the operating profit margin by about 1.9 percentage points.
Additionally, profits decreased by approximately 727 billion won as incentives were expanded and prices lowered to boost electric vehicle sales in Western Europe and domestically. The cost of goods sold ratio rose by 3 percentage points to 84.1%. This was influenced by increased incentives (1.9 percentage points) and higher material costs (1.2 percentage points). The selling, general, and administrative expense ratio decreased by 3.7 percentage points to 10.1% due to a reduction in sales guarantee expenses.
Global retail sales increased by 6.9% to 829,000 units. Sales in Africa and the Middle East decreased by 23%. Domestic sales rose by 2.2% to 141,000 units, while U.S. sales increased by 7.8% to 234,000 units. Market share stood at 36.8% domestically and 5.8% in the U.S. Sales in Western Europe (145,000 units) and India (89,000 units) increased by 16.9% and 38.5%, respectively.
Sales of eco-friendly vehicles, including HYBE (Hybrid) vehicles and electric vehicles, rose by 47% to 300,000 units, accounting for 36.2% of total sales. Electric vehicle sales reached 123,000 units, of which 63,000 were sold in Western Europe. HYBE (Hybrid) vehicle sales totaled 172,000 units. U.S. HYBE (Hybrid) vehicle sales exceeded twice the level of the same period last year at 69,000 units.
Kia plans to increase HYBE (Hybrid) vehicle sales in Korea and the U.S. in Q4. In the U.S., it will launch the Seltos HYBE (Hybrid) and expand production capacity for the Telluride HYBE (Hybrid). In Western Europe, it aims to raise the share of electric vehicle sales to 33% this year, while targeting sales of 330,000 units in India.
in INDUSTRY
