South Korea's Kia posts 29pc jump in Q4 profit

January 24, 2014 - 8:41:31 am

SEOUL: South Korea's Kia Motors on Friday posted a 29 percent surge in fourth-quarter net profit, partly due to increased sales of pricier models, but warned of an uncertain outlook owing to stiff competition and a strong won.

Net profit rose to 949 billion won or $882 million from 737.4 billion won in the same period last year when it set aside 200 billion won to compensate US buyers for inaccurate fuel-consumption estimates in some vehicles.

Sales rose 4.3 percent year-on-year to 11.76 trillion won and operating profit soared 61 percent to 650 billion won.

But for 2013, net profit fell 1.2 percent year on year to 3.81 trillion won, the company said, citing labour strikes, a strong local currency and poor domestic sales.

Last year operating profit dropped 9.8 percent to 3.17 trillion won while sales were up 0.8 percent to 47.6 trillion won.

The company predicted fierce competition from rivals this year but promised to upgrade its brand image by launching new models including mini-vans and premium sedans.

"We expect global market uncertainty to continue this year. The won is maintaining its upward trend, while competition is intensifying with aggressive marketing activities by rival auto makers and a series of new launches," it said in a statement.

South Korea's top auto maker Hyundai Motor owns 34 percent of Kia and together they form the world's fifth-biggest car maker by sales.

Hyundai and Kia have seen rapid growth following the global financial crisis in 2008, with sales benefiting mainly from the won's protracted weakness.

But the won has risen steadily in the past year against the dollar and the Japanese yen, hitting its highest level against both currencies in about five years.

A strong won weakens the price competitiveness of South Korean exporters, and reduces the value of their overseas earnings when repatriated.

Kia and Hyundai forecast their weakest combined sales volume growth in more than a decade this year.

On Thursday Hyundai reported its first quarterly revenue decline in three years. (AFP)

 

 

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