May 20, 2014 13:17
Kia Motors' accumulated sales will exceed 30 million cars this month as the automaker marks its 70th anniversary.
Kia sold 2.82 million cars at home and abroad last year and achieved W47 trillion in revenues and W3.1 trillion in operating profit (US$1=W1,022).
Since being acquired by Hyundai Motor in 1998 after staggering under heavy debt during the Asian financial crisis, Kia has managed to become a global automaker.
Yet the atmosphere at Kia seems less than celebratory, with various scheduled events canceled -- not just as a sign of respect for the victims of the ferry disaster but because many feel that Kia still remains somewhat concealed in the folds of Hyundai's vast skirts.
Kia only made serious forays into the global market after its acquisition by Hyundai in 1998. Its overseas sales have since increased 10-fold, with 2.37 million cars sold last year compared to just 250,000 in 1998. And it has grown to rival Hyundai in the domestic market.
But the growth momentum has slowed. In April, Kia sold 39,000 cars in Korea, down around four percent on-year. Its monthly sales have hovered below 40,000 for four straight months since December last year.
In contrast, Hyundai and rival Korean automakers have seen sales rise over the same period.
Sales of Kia's flagship K series (the compact K3, mid-sized K5, large K7 and luxury K9 sedans) have been disappointing. Experts say that the models are now so outdated that their designs are losing appeal.
One industry insider said, "Unlike Hyundai, which is rolling out new models of its Sonata and Genesis sedans, Kia has had no new hit models recently."
The fundamentals are also less strong than they were. The automaker's operating margin, which peaked at 8.1 percent in 2011, fell to 6.7 percent in 2013, the lowest since 2010.
Manufacturing 40 percent of its cars here in Korea is proving a weakness as the won strengthens. Experts warn that Kia could end up becoming a sub-brand of the country's leading automotive group if it fails to distinguish itself sufficiently.
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