Global Vehicle Sales Fall 1.9% on Year
Kia Motors Corp. announced its first-quarter business results for 2020 on April 24, reporting a 1.9 percent year-on-year decrease in quarterly global vehicle sales.
The company sold a total of 648,685 vehicles on a wholesale basis in the January-March period, compared with 661,355 units a year earlier, as demand in Korea helped mitigate negative impact from the spread of COVID-19 in markets such as China and Europe. Sales in Korea totaled 116,739 units, up 1.1 percent year over year, while sales outside Korea slid 2.6 percent to 531,946 units.
Kia Motors recorded quarterly sales revenue of 14.57 trillion won, 17.1 percent higher than the 12.44 trillion won reported for the same period in 2019. Favorable exchange rates, improved product mix as well as strong performance of key models such as the Telluride and Seltos SUVs contributed to higher revenue.
Operating profit in the first quarter posted 444.5 billion won, down 25.2 percent year-on-year compared with 594.1 billion won a year earlier, during which time a one-off item helped boost profits.
Quarterly net profit (including minority interests) declined 59 percent from the same period in 2019 to 266 billion won as earnings contributions from affiliated companies contracted while the end-quarter fluctuation in the won/dollar exchange rate also adversely impacted on the net profit.
The company anticipates that it is likely to face weakening profitability from the second quarter as the global spread of COVID-19 would take full effect to its business environment around the world, leading to greater uncertainty to the global economy and consumer demand in automobiles. Suspension in production facilities and halts to some dealership operations would adversely affect vehicle supplies, too.
To flexibly cope with the uncertain business environment, Kia Motors plans to enhance its product competitiveness with new model line-up. The company will focus its efforts on sales of SUVs, notably the Telluride, Seltos and recently launched all-new Sorento. Kia will introduce customer-centric marketing and promotion activities tailored to each market, reflecting shifting customer needs in the era of pandemic. The company also plans to introduce an all-new compact SUV to the Indian market in the third quarter to further boost sales momentum.
Despite the tough business environment, Kia Motors plans to continue to focus on realizing the mid- to long-term strategy of ‘Plan S’, under which it aims to proactively introduce 11 battery electric models and increase operating profit margin to 6 percent by 2025.