Kia registers 182% jump in Q4 net profit, targets 2.92 million sales in 2021

Kia has announced its 2020 fourth-quarter business results and the carmaker has reported a 5 percent year-on-year (YoY) rise in quarterly revenue to KRW 16.91 trillion.

Kia sold 742,695 units across global markets during the October-December 2020 period, recording a slight decrease from 742,733 units compared to the same period last year. This is attributed to the decline in sales in Korea by 5.2 percent to 137,389 units, due to the ongoing challenges presented by the Covid-19 pandemic and product disruptions.

Sales outside of Korea, however, climbed 1.2 percent to 605,306 with strong recovery in the US, alongside significant growth in India, where sales of its Seltos and newly-launched Sonet compact crossover have given it a shot in the arm to register an overwhelming 260 percent YoY growth in sales from 8,000 units in Q3 2019 to 30,000 units in Q3 2020.

Profit doubles in Q4
Kia Corporation’s fourth-quarter operating profit more than doubled from a year earlier to KRW 1.28 trillion, with an operating profit margin at 7.6%. The company’s net profit also increased to KRW 976.8 billion, up 182 percent during the same period.

The company attributes the strong performance to its enhanced global product mix and ongoing success of the brand’s high-margin SUV / RV models, including Telluride, Seltos, and Sorento SUVs and the Carnival minivan. Sales of Kia’s RV models accounted for 58.7 percent of the total sales volume, the highest RV share ever and leading overall profit growth.

For the entire year – 2020 - Kia’s revenue rose 1.8 percent to KRW 59.17 trillion from KRW 58.15 trillion in 2019, while operating profit advanced 2.8 percent to KRW 2.1 trillion, up from KRW 2 trillion. Net profit, on the other hand, decreased by 17.7 percent to KRW 1.5 trillion.

Full-year global sales volume decreased 7.6 percent from 2019 to 2.61 million units, with 552,400 units sold in Korea and 2.05 million across the rest of the world.

2021 outlook: India shining
Now, Kia is targeting global sales of 2.92 million units in 2021, eyeing a 12.1 percent increase compared to 2020 global sales volume. The company is targeting sales in Korea of 535,000 units and 2.39 million units for sales outside of Korea.

In India, as part of its mid-to-long-term volume plan, Kia’s subsidiary Kia Motors India is set to increase its domestic sales volumes from nearly 138,000 units in 2020 to 158,000 units in 2021, eyeing a 14.5 percent growth. Exports are also pegged to almost double from 39,000 units to 78,000 units taking the combined production at its Anantapur plant in Andhra Pradesh to 234,000 units, just 60,000 units short of its installed annual capacity

The company has pegged CY2021 volumes for the Seltos at 70,000 units in the domestic market and 41,000 in exports, while the Sonet gets to explore the potential of a relatively more mass-market sub-compact segment with 100,000 units chalked out for domestic sales and 44,000 units in exports from India.

To achieve maximum capacity utilisation by 2022, the Korean carmaker has revealed an incremental plan, wherein it will introduce an India-strategic midsized MPV in January 2022, eyeing 50,000 domestic units from this strategic new model, which is codenamed – ‘KY’. The Kia KY MPV is expected to take on the likes of the Toyota Innova Crysta and the Maruti Suzuki Ertiga.

Kia Corporation says it will continue to enhance its product line-up with new models, including the launch of its first dedicated battery electric vehicle model.

Kia’s board of directors have also approved a plan to pay a year-end dividend of KRW 1,000 per share to its shareholders. The company is seeking to balance new investment needs and shareholder returns alongside its mid to long-term commitment to enhance shareholder-friendly policies.