Kia Motors Corp., South Korea’s second-biggest automaker, reported a wider loss because of a stronger won, slumping sedan sales and labor disputes.

The net loss was 55.1 billion won ($60 million) in the third quarter, compared with a 43.9 billion won loss a year earlier, the Seoul-based automaker said in an e-mailed statement today. Sales fell 6.7 percent to 3.27 trillion won.

The won strengthened 2.9 percent against the dollar, cutting the repatriated value of Kia’s overseas sales, about 75 percent of revenue. Domestically, strikes cut production and drivers shunned Kia’s Opirus sedans for less-profitable Morning compacts.

“The eroding product mix and output disruptions contributed to the loss,” said Han Kum Hee, an analyst at Samsung Securities Co. in Seoul. “I don’t expect to see a pick-up in earnings until 2009 when new models come out,” said Han, who rates Kia “buy.”

Hyundai Motor Co., South Korea’s biggest carmaker, yesterday reported a 45 percent jump in third-quarter profit, beating estimates, after a pay deal reduced disruptions from striking workers. The automaker is Kia’s biggest shareholder with a 39 percent stake.

2008 Profit

Kia expects to make a profit next year helped by the introduction of five new or revamped models in South Korea, Chief Executive Officer Cho Nam Hong told reporters in Seoul today. The carmaker aims to raise its share of the South Korean market, its most profitable, to 25 percent next year from an expected 22 percent this year, Cho said. It aims to sell 318,000 vehicles domestically in 2008.

“It’s a pretty reasonable target,” Cho said.

The company expects to make an operating profit this year, Chief Financial Officer Ahn Hee Bong said, declining to give a specific estimate. In July, Kia cut its full-year operating profit target 26 percent to 290 billion won. The carmaker aims to make an operating profit of 1 trillion won by 2010, Cho reiterated today.

U.S. Sales

Kia’s U.S. vehicle sales may rise as much as 8.7 percent this year to as high as 320,000, said Kim Deuk Ju, a director in the treasury division. The carmaker plans to take a 5 percent share of the U.S. market after the 2009 opening of a plant in Georgia, its first in the country.

The carmaker dropped 5.7 percent to 10,750 won at 12:13 p.m. in Seoul trading, compared with the benchmark Kospi index’s 1.3 percent gain. The stock jumped the most in six years yesterday after billionaire Warren Buffett said he bought shares in the company in 2002.

Kia lost production of 23,246 vehicles worth 337.7 billion won from July 3 to Aug. 13 because of stoppages from a pay dispute. It lost a further 10,000 vehicles after workers from subcontractors occupied the assembly line at its main domestic plant for about week around the end of August.

Domestic sales of Opirus sedans, Kia’s most expensive model, fell 37 percent from a year earlier after a boost in 2006 from the introduction of a revamped model. The slump contributed to a fall in Kia’s average vehicle selling price, as a greater proportion of sales came from cheaper models.

Small Cars

Small cars accounted for 68 percent of Kia’s third-quarter unit sales, compared with 61 percent a year earlier, according to an estimate by Kim Young Roe, an analyst at Deutsche Bank AG. The average selling price likely fell 8 percent from a year earlier, Kwak Eun Sook, an analyst at Macquarie Securities Ltd., said in an Oct. 17 report.

The automaker sold 226,053 vehicles made at domestic plants in the July-September period, 1.7 percent more than a year earlier, the statement said. Domestic sales rose 0.7 percent to 63,314, and exports climbed 2.1 percent to 162,739.

Kia cut factory prices on export models about 6 percent earlier in the year, it said today. The move was designed to help a money-losing affiliate become profitable.

The carmaker’s Chinese venture sold 19,950 vehicles in the third quarter, 7.4 percent less than a year earlier. The company aims to sell 15,000 vehicles a month in the country next year, after a second Chinese plant began production earlier this year, Kim said. A factory in Slovakia opened in December.

In the first nine months, Kia posted a loss of 24.3 billion won, compared with 39.6 billion won a year earlier. Sales declined 8.9 percent to 11.26 trillion won, and the operating loss widened to 153.1 billion won from 70.3 billion won.

The company may still hold a $500 million debt sale, CFO Ahn said today. The sale was scrapped in June as concerns over subprime mortgages boosted borrowing costs. [Source: Bloomberg]