Kia Motors Corp. posted a 29-percent jump in profit in the fourth quarter of 2013 to KRW949 billion ($882 million), thanks to stronger sales of pricier models in South Korea. These results are better than the KRW909-billion average of 25 analysts' estimates polled by Bloomberg.
Stronger sales of Sportage and Soul vehicles at home was the bright spot for Kia in the fourth quarter of 2013, at a time when stronger won affected revenues in the United States, and the carmaker agreed to settle lawsuits for overstating fuel-economy ratings. Kia and affiliate Hyundai are expecting their weakest combined sales growth in eight years amid the stiff rivalry and a stronger won that hampers exports.
"Kia is relatively more vulnerable to the unfavorable exchange rates than Hyundai is, as it's more dependent on its plants in Korea," Lee Hyun Soo, an analyst at Kiwoom Securities Co., told Bloomberg. He expects Kia to perform better this year, hoping to ride on new and profitable models like the Sorento SUV that will be available in the second half.
The South Korean won has gained 3.4 percent against the US dollar and 6.7 percent versus the Japanese yen in the past six months. Kia targets to hike its deliveries in 2014 by 5 percent to 2.96 million vehicles, according to comments by Chairman Chung Mong Koo to employees during a New Year address. The chairman said that Hyundai and Kia's combined deliveries will surge 4 percent to 7.86 million vehicles in 2014 -- the slowest growth since 2006.