Kia saw its net profit in the fourth quarter of 2014 drop 54 percent to KRW436 billion ($402.10 million), no thanks to weakening Russian ruble that made money earned in the country lessen in value. According the South Korean carmaker, it expects sales in Russia to plunge 12 percent this year, as people would tend to shy away from vehicle prices that could become higher due to the ruble’s depreciation.
Its affiliate, Hyundai Motor, also logged a drop of 19 percent in net profit, pointing the blame to the weakening ruble and higher incentives in the United States. Kia shares a Russian plant with Hyundai and locally builds about 45 percent of vehicles it sells in the country, with the rest imported from South Korea and Slovakia.
However, those imported vehicles include the more expensive and higher-value products like the midsize Optima sedan and the Sportage and Sorento compact SUVs. Kia has had hiked the prices of some vehicles in Russia, and has been shifting some shipments to other markets.
For the full year 2014, Kia posted a 1-percent drop in Russia to 195,691, according to data from the Association of European Business (AEB).