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 through the expansion of electrified models and the introduction of new vehicles.
In South Korea, sales of electric models such as the EV3, EV5, and PV5 contributed to an 8.6% increase year-on-year. In the U.S., strong sales of SUVs like the Telluride, Sportage, and Sorento led to a 2.8% rise. Western Europe saw a 12.9% increase, significantly outpacing the market growth rate of 4.8%, thanks to the introduction of new models like the EV2, EV4, EV5, and PV5.
As a result of 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 marked the highest level of market share recorded.
The increase in revenue was largely driven by the expansion of HEV and EV sales 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 a rise in sales warranty provisions due to the depreciation of the won. The cost of sales ratio increased to 81.7%, up 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 same period last year. Their share of total sales rose to 35.3%, an increase of 11.9 percentage points.
EV sales 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 increased by 123.4%, while sales in Western Europe rose by 101.5%.
Hybrid sales also grew 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 models and 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 Hyundai Motor Group's Metaplant America (HMGMA), will begin deliveries in the second half of the year. Additionally, the Mexico-produced 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 Sung-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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