Seoul: Kia Corp., South Korea's second-largest automaker, reported record sales for the first quarter, driven by strong demand for hybrid and high-margin vehicles, despite a decline in operating profit due to a base effect.
According to Yonhap News Agency, Kia's sales for the January-March period increased by 6.9 percent from the previous year, reaching 28.01 trillion won (US$19.53 billion) on a consolidated basis, marking an all-time high for a first quarter. However, the company's operating profit fell by 12.2 percent on-year to 3 trillion won, and net profit decreased by 14.8 percent to 2.39 trillion won.
Despite the record sales, the earnings did not meet market expectations. Analysts had estimated a net profit of 2.46 trillion won, as per a survey conducted by Yonhap Infomax, the financial data firm of Yonhap News Agency. During the same period, Kia sold a total of 772,648 vehicles globally, which is a 1.6 percent increase from a year earlier.
Kia credited the strong sales performance to an increasing demand for hybrid and eco-friendly models, along with high-value sport utility vehicles (SUVs). The company noted a particular rise in demand in the United States, preceding tariff hikes imposed earlier this month, as well as robust sales in India and other emerging markets.
The automaker explained that the decline in operating profit was due to a sharp reduction in incentives in major markets during the first quarter and a base effect from last year's strong EV9 sales in North America.
Domestically, Kia's sales dropped by 2.4 percent to 134,564 units due to the discontinuation of models such as the K3 and the Mohave. Meanwhile, overseas sales increased by 2.5 percent to 638,084 units, fueled by solid demand in North America, a successful launch of the Syros in India, and growth in the Middle East and Latin America. In Europe, sales fell slightly as buyers awaited the updated Sportage PE model, which is set to launch in the second quarter.
Kia stated that it will continue to reinforce its high-value model lineup and adapt flexibly to market changes amid growing global uncertainty.