Kia Corp., South Korea’s second-largest automaker and part of the Hyundai Motor Group, has reported record profits and sales for 2023. This surge in revenue and profit is attributed to robust sales of premium models and an improved product mix. Despite global concerns over the slowing pace of electric vehicle (EV) uptakes, Kia remains optimistic, setting ambitious sales and profit targets for the current year.
In a regulatory filing, the company announced a net profit of 8.78 trillion won ($6.6 billion) for last year, a substantial 62.3% increase from the previous year. Operating profit soared to an all-time high of 11.6 trillion won, up 60.5% on a year-on-year basis, with sales climbing 15.3% to a record 99.8 trillion won.
Kia’s performance in 2023 was bolstered by record global vehicle sales, including an increased proportion of high-end models and favorable exchange rates. The company sold a record 3.08 million vehicles globally during the year. However, the fourth quarter saw a decline in net profit and operating profit, attributed to increased sales incentives and the strength of the won against the dollar.
Despite a weaker fourth quarter, Kia maintained a double-digit operating profit margin for the fifth consecutive quarter. For 2024, the company targets an operating profit of 12 trillion won on sales of 101.1 trillion won, eyeing a margin of 11.9%. This target is supported by Kia’s continued push in the EV market and an enhanced eco-friendly vehicle lineup, particularly in the US and European markets.
In a move to further boost shareholder value, Kia plans to buy back 500 billion won worth of treasury shares this year, retiring half by the end of June. If the 2024 targets are met, the company will retire the remaining repurchased shares by year-end.
Following the earnings announcement, Kia’s shares experienced a 3.9% increase in early trading in Seoul, even as the broader Kospi index fell. These results set a positive tone for Hyundai Motor, which is slated to release its own results later in the day. Kia’s record-breaking performance in 2023 and its ambitious goals for 2024 reflect the company’s adaptability and resilience in a rapidly evolving automotive market.
