During a conference call on April 27, Kia said its first-quarter operating profit slumped 39.6 percent to 382.8 billion won on-year, hit by lower sales in its major markets China and the US.
The result was slightly above the market consensus of 1.22 trillion won. "We will also solidify the company's future competitiveness on a thorough localization strategy", the company said.
Sales rose 5 percent to 23.4 trillion won ($20.8 billion).
Hyundai saw its China retail sales slump 14 per cent in the first quarter, dented by anti-Korea sentiment in the wake of Seoul's decision to deploy a USA anti-missile system which has angered China. Competing brands also rolled out promotions playing on the anti-Korean sentiment to win over consumers from Hyundai, Vice President Koo Zayong said on a conference call on Wednesday. "Based on what happened between China and Japan over a territorial dispute in the past, sales could recover around the end of the second quarter or beginning of the third quarter", said Chang Moon-su, an analyst from Kiwoom Securities. KIA Motors sells several models, Sportage, Optima, Cadenza, Soul, globally and has manufacturing facilities in Korea and Mexico.
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Sales in the United States also showed a 12.7 percent decline, the company said. The company is yet to announce its initial product line-up for India, as it hasn't conducted a feasibility study yet but says that it wants to have three models in the country at launch: a mainstream model, a premium model and a brand image model. These models will be especially for Indian markets.
This company is planning to sell compact Sedan and an SUV starting from the year 2019.
South Korea's biggest auto manufacturer said in a statement that slow global growth, intensifying competition and concerns over trade protectionism in the auto industry are among the uncertainties for the business. "This is Kia Motors's ultra-mega integrated project which will add to the AP's fast developing automotive ecosystem and will have a spin-off effect on the industrial development and employment in the region", the official pointed out.