Seoul:Kia Corp. reported a 9.6 percent decline in its third-quarter net profit compared to the previous year, primarily due to unfavorable foreign exchange movements, despite a robust operating profit driven by reduced U.S. auto tariffs.
According to Yonhap News Agency, the net profit for the July-September period was 1.28 trillion won (US$961.6 million), down from 1.42 trillion won a year earlier. In contrast, the operating profit saw a significant increase of 24.3 percent year-on-year, reaching 1.81 trillion won, aided by a reduction in U.S. tariffs on automobiles from 25 percent to 15 percent.
However, Kia noted that rising raw material costs and ongoing conflicts in the Middle East impacted profitability, adding nearly 600 billion won in costs compared to the same period last year. Sales rose 10.1 percent year-on-year to 31.59 trillion won in the third quarter, bolstered by a 7.9 percent increase in global wholesale vehicle sales to 847,355 units.
The company's overseas sales accounted for 83.4 percent of the total, while domestic sales constituted the remaining 16.6 percent. Kia's global market share increased to 4 percent in the first nine months of the year, up by 0.4 percentage points from a year earlier, with strong sales in major markets supporting this growth.
Retail sales of electrified vehicles, including electric vehicles (EVs) and hybrid electric vehicles (HEVs), surged 47 percent year-on-year to approximately 300,000 units in the third quarter, making up 36.2 percent of total sales. This growth was attributed to Kia's strategy of tailoring its powertrain lineup to regional demand amid high global oil prices, with stronger EV demand in South Korea and Western Europe, and growing hybrid demand in the United States.
Looking ahead to the fourth quarter, Kia plans to enhance sales of higher-margin hybrid models in South Korea and the U.S. to further improve profitability. Jung Sung-kook, a senior vice president, expressed optimism during an earnings conference, stating, "Kia expects a swift recovery in profitability, backed by its strong automotive business, once external pressures, including rising raw material costs and instability in the Middle East, ease."