On July 27, Kia announced its operating results report for the second quarter of 2023. The report shows that Kia sales in the second quarter were 26.24 trillion won (about 146.7 billion yuan), up 20% year-on-year; operating profit was 3.4 trillion won, up 52.3% year-on-year; net profit was 2.8 trillion won, up 49.8% year-on-year. In addition, the results report showed that in the first half of this year, Kia's operating profit margin was 13.0%, exceeding Hyundai's 10.05%, while Tesla's operating profit margin fell to 9.6% during the same period.
For the operating results report, Kia related person said: "In the case of strong sales volume, due to the expansion of supply brought about by production normalization, sales increased, in the case of continuous improvement of revenue structure such as sales expansion centered on high-yield vehicles, incentive reduction, etc., coupled with the impact of friendly exchange rate, Kia finally increased its earnings in the second quarter." In addition, Kia said that since the large-scale brand renewal in 2021, brand power around the world has continued to strengthen and the underlying revenue structure is improving. Kia decided to raise its annual sales and profit targets for the year. Among them, sales increased from 97.6 trillion won to "more than 100 trillion won", operating profit target increased from 9.3 trillion won to "11.5 trillion won to 12 trillion won", operating profit margin increased from 9.5% to "11.5 to 12.0%".
In terms of new car sales, Kia's global sales volume in the second quarter of this year was 807,800 vehicles, up 10.1% year-on-year. Among them, the sales volume in the local market was 15,800 vehicles, up 7.1% year-on-year; the sales volume in overseas market was 657,000 vehicles, up 10.8% year-on-year.
At the beginning of this month, Kia announced through official micro-blog, In the first six months of this year, Kia global total sales of 1.5759 million vehicles, Year-on-year growth of 11.0%, A record high sales in the first half of the year; Among them, Overseas market sales of 1.2811 million vehicles, Year-on-year growth of 10.8%; South Korean market sales of 292,100 vehicles, Year-on-year growth of 11.5%. In addition, foreign media reported that in the first half of this year, Hyundai Motor and its subsidiary Kia's market share in the United States totaled 10.6%, up 0.3% year-on-year, which is the first time Hyundai and Kia's market share in the United States rose to double digits last year. Hyundai accounted for 5.5% and Kia 5.1%, while General Motors ranked first with 16.7%, Toyota 13.5% and Ford 13%.
In the sales data, Kia did not disclose the sales volume of the market segment, and now Kia's performance in the Chinese market and the global market is completely different. Compared to its global business, Kia is very lonely in the Chinese market. Take the sales data of 2022 as an example, the number of risks shows that the sales volume of Kia in China in 2022 is 94345 vehicles, down 40.5% year-on-year, far from the peak sales volume of 650,000 vehicles in China market in 2016. The industry believes that the reason why Kia's sales in China have not improved is related to the decline of its product brand power and the slow transformation of electrification.
More difficult is that sales decline at the same time, Kia in China also appeared insolvency dilemma. As of December 31,2022, Kia's joint venture in China, Jiangsu Yueda Kia Automobile Co., Ltd., had total liabilities of 2476.8 billion won (about 13 billion yuan) and total assets of 2080.9 billion won (about 10.9 billion yuan), according to the financial report. According to this calculation, Jiangsu Yueda Kia has fallen into insolvency, with an asset-liability ratio of 119.3%.
It should be noted that although Kia's sales in the Chinese market are sluggish, Kia has repeatedly stressed that it will not give up the Chinese market. According to the plan, Kia will launch at least one pure electric vehicle based on E-GMP platform every year in China from 2023, and will launch a total of six pure electric vehicles by 2027, striving to achieve the goal of annual sales of 180,000 pure electric vehicles by 2030, accounting for 40% of sales. In other words, the new energy vehicle will be Kia's stepping stone to open up the Chinese market, but Kia's first global model, the Kia EV5, is scheduled to launch in November.
At the 15th China Auto Blue Book Forum, Yang Honghai, chief operating officer (COO) of Kia China, said in public that the technology accumulation, talent accumulation and globalization experience of joint venture automobile enterprises, including global profits, are far greater than those of local enterprises. Yang Honghai bluntly said: "I earned 2.1 billion US dollars globally in the first quarter of this year, and I can afford to stick to the Chinese market. Do you have the financial strength to play with these local enterprises?" You burn to death first, I wait later to come in and grab the market. Let the enemy try to hurt first, I have money in my pocket, it is all technology, I have not given up this market, at the right time to come in and clean up you is also a strategy."
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