Kia keeps on record sales streak Q3, income more than halved from recall provision

[Photo by Lee Chung-woo]

South Korean automaker Kia kept up record sales streak in the third quarter led by green and recreational vehicles, although income shrank 66 percent against the previous quarter to reflect extra 1.54 trillion won for recalls related to faulty Theta 2 engine.

Kia disclosed Tuesday its operating income came to 768.2 billion won ($535.5 million) in the third quarter ended on Sept. 30, 2022, down 65.6 percent from three months ago and 42.1 percent from a year earlier.

Revenue rose 5.9 percent on quarter and 30.5 percent on year to a fresh quarterly high of 23.2 trillion won.

Its shares rose 1.53 percent to close at 66,300 won on Tuesday.

The company and sibling Hyundai Motor had already warned of halved income as the result of extra loss provisions for recall expenses.

Without the loss reserves, Kia¡¯s third-quarter income would have been higher than record quarterly profit of 2.23 trillion won set in the April-June period.

Kia sold 751,788 cars at home and abroad in the third quarter, 9.9 percent greater than a year ago. Its domestic sales were 132,768 units and overseas sales 619,020 units, up 6.2 percent and 10.7 percent, respectively.

The company expects to maintain solid sales growth in the fourth quarter with improved profitability on eased auto chip shortages, said a Kia official.

The Korean automaker lost some sales in Russia due to the war in Ukraine, but it managed to shift sales direction to other regions with higher profitability. Also, its new cars including all-new Sportage crossover SUV and Niro Hybrid SUV have been received well, said the company official.

[¨Ï Maeil Business Newspaper & mk.co.kr, All rights reserved]