SEOUL, Apr. 27 (Korea Bizwire) — Kia Motors Corp., South Korea’s second-largest carmaker by sales, said Friday its first-quarter net profit plunged 44 percent from a year earlier on the strong won and weak overseas sales.
Net profit for the January-March quarter fell to 432 billion won (US$401 million) from 765.4 billion won a year earlier, the company said in a statement.
“The won’s strength against the dollar, weak sales in major markets and an increase in overseas incentives amid tough competition with rivals cut into the quarterly bottom line,” the statement said.
The dollar traded at an average of 1,072.3 won in the first quarter from 1,154.3 won a year earlier. A strong won drives down the value of dollar-denominated overseas earnings when converted into the local currency.
Operating profit declined 20 percent to 305.6 billion won in the first three months from 382.8 billion won a year ago. Sales were down 2.2 percent to 12.562 trillion won from 12.844 trillion won during the same period, it said.
To revive sales in the coming quarters, Kia plans to increase the ratio of sport utility vehicles in its lineup and put a bigger focus on emerging markets, the company said.
Kia sold 127,000 vehicles in China in the first quarter, down 0.6 percent from 128,000 units a year ago. Kia’s sales in the United States fell 5.0 percent to 85,000 autos from 89,000 units, it said.
Globally, Kia sold 645,495 vehicles in the March quarter, up 0.2 percent from 643,944 units in the year-ago period, the statement said.