The upbeat investment mood regarding Kia Motors Corp. is accelerating as the weak Korean won and sales recovery are quickly improving the company’s bottom line. Analysts say that the nation’s second-largest automaker will be in the black this year after suffering losses for two consecutive years.
“The worst appears to be behind Kia, as the won’s weakness are creating unexpected gains,” said Han Kum-hee, an analyst with Samsung Securities Co. She estimated that the company will post nearly 400 billion won ($420 million) in operating income this year, up from a loss of 55 billion won in 2007.
The stronger-than-expected U.S. dollar is the biggest contributor to the recovery, she said. Kia Motors, which exports about 70 percent of its total output, has been suffering harsh setbacks in recent years because the fast appreciation of the Korean won has undermined the company’s overseas price competitiveness.
Though its mother company, Hyundai Motor Co., can avoid a major sting to it offshore manufacturing plants, and it has a better brand identity, Kia Motors has lacked such competitive edges so far.
The company’s overseas sales affiliates have also been losing money due to the currency problem. But a recent depreciation of the local currency is helping to raise the profit margin of the exports.
The carmaker is also planning to renew its lineup in the coming months so as to improve sales, which have been weak of late. Kia Motors’s marques have been largely underrated compared to those of Hyundai Motor here and abroad, limiting the profit margins of the company.
The company plans to unveil four new models before the first half of next year, thereby making its showrooms as fully packed as those of its major rivals. Industry watchers predict that the new lineup will substantially help increase earnings in the years to come.
But skepticism still remains regarding Kia Motors. Critics point out that its global sales are not expanding as quickly as investors had hoped, in spite of the weak won. Though the company seemingly hit the bottom, these observers remain doubtful of a rebound.
“The first-quarter earnings may not meet the expectations of the market,” said Choi Dae-shik, an analyst with the CJ Investment & Securities Co. He explained that sales recovery is not in full gear yet, and cautioned that the current stock rally could be short-lived. [Source: Koreaherald.co.kr]
April 14th, 2008 at 10:40 am
four new models!!! O goodie. spectra, its coupe, optima, and SOUL?
April 14th, 2008 at 5:37 pm
Do you think they’ll count the Optima? It’s really just a “facelift,” so is it technically “new,” like the Spectra and Soul will be? I wonder when there will be an update to the Amanti… Possibly have a similar platform to the Genesis? Another question is if the revealing of four new models is for worldwide units, or just Korean Domestic Market?
April 14th, 2008 at 6:07 pm
the next opirus will be based on the Genesis platform.
April 14th, 2008 at 6:20 pm
Based on, with RWD and available V8?
if so!
April 14th, 2008 at 6:31 pm
Not very sure about anything besides “its based on the genesis”
April 14th, 2008 at 6:34 pm
here’s the info you need
2008 ————– Borrego/mohave
First Half 2008: — Morning/Picanto Minorchange, Soul crossover(AM codename), Pride/Rio Minochange, Successor of Cerato (TD codename), Lotze minorchange
First half 2009 : — Next gen Sorento (XM codename), VG (Grandeur badge)
Second Half 2009 : Successor of Opirus (CH Codename share with Hyundai BH), XK coupe (Hyundai BK brother model), SL Suv
April 14th, 2008 at 6:35 pm
woops! this one is in better order
2008 – Borrego/mohave
First Half 2008: — Morning/Picanto Minorchange, Soul crossover(AM codename), Pride/Rio Minochange, Successor of Cerato (TD codename), Lotze minorchange
First half 2009 : — Next gen Sorento (XM codename), VG (Grandeur badge)
Second Half 2009 : Successor of Opirus (CH Codename share with Hyundai BH), XK coupe (Hyundai BK brother model), SL Suv
April 14th, 2008 at 7:09 pm
In other words a whole lotta automotive activity is a brewin’ at Kia. No doubt the U.S. market will get the same new models as South Korea will, too. I think you mean the 2nd half of 2009 for the TD-Cerato/Spectra, too, Boris. That’s the one I can’t wait to see, along with a possible Kia Kee Coupe and of course the Kia Koup(Spectra Coupe)itself. Lots happenin’ and Kia sales should move upwards abroad and in their home market.
April 14th, 2008 at 7:32 pm
thats just what the site said. but they can always have minor fauts in the info. and something like this will always have faults. there can be delays so Kia will obviously not be following the same schedule the whole time with those delays.
April 14th, 2008 at 9:35 pm
I think the fourth model mentioned in the article is the Pride/Rio. But those data is for Korean market, so it’s šossible we will se Rio facelift debut in 09.
So far, we have seen Mohave and Morning debut. Next there will be Lotze/Optima, TD and Soul. We (and Kia) have a very vivid 8 months ahead of us and I’m sure we will get plenty of spy pics before these new model hit the market.
April 14th, 2008 at 9:40 pm
with all this excitement, we shouldnt forget about next month. its may and it will be this blog’s “first succrssful year” mark. wonder what the rio facelift will be based on…
April 14th, 2008 at 9:47 pm
Regarding the profit Kia is expected to turn, I wish the company would be more profitable. They sell about the same number of cars each year as Honda, but Honda always posts profit and Kia doesn’t. Of course, Kia is very sensitive to the strong domestic currency. When the value of Korean Won goes up compared to $ then Kia looses money. This has happened last year. This year looks more promissing and we might see Kia make some profit.
The main goal for Kia, besides producing hot vehicles, should be to become more independent against Won, $ value. This will only happen when Kia builds enough (up to 50%) of capacity to produce cars outside of Korea and build attractive cars that have strong demand in all of the car life cycle- not just in it’s first year.
April 14th, 2008 at 10:09 pm
kia has to give more options in their models. with some of these new models coming up, Kia will attract a new batch of people [kia soul, borrego]. best of luck kia.
April 14th, 2008 at 10:40 pm
True on that Boris. Kia still lacks some tech that’s becoming very popular on all models (B segment cars to luxury cars). I mean you can’t find glass-roof on any Kia, you hardly get xenon lights. Very popular are also bi-xenons and also front lights that follow the direction you drive. There are LEDs in rear lights missing….and there’s more.
The most stupid idea is that Kia does offer some of these gadgets on Korean market…but only on Korean market.
Why don’t they try to sell these on every market??
Perhaps people would be willing to pay for these options. At least I’d be interested and I know you guys would be happy to see some more advanced tech in Kias too.
April 14th, 2008 at 10:44 pm
maz6 has bi-Xenon and LEDs and electric steering. btw, whats the difference in bi-xenon and xenon
April 14th, 2008 at 10:52 pm
Bi-Xenons use a reflector inside the lens assembly that raises the cut-off of the projected beam pattern.
With a normal Xenon when you switch on the high-beams, it turns on the inner Halogen light. With a bi-xenon- it just raises the height of the Xenon.
April 14th, 2008 at 10:55 pm
doesnt opirus have the turning headlamps? or was that genesis?
April 14th, 2008 at 10:58 pm
It’s the Genesis. And because of Kia shares tech with Hyundai, we will see them on next Amanti also. But will take some time Kia develops it…
April 15th, 2008 at 12:32 am
Actually, I HATE Xenon headlights. They are incredibly blinding!
April 15th, 2008 at 1:48 am
Now I heard that Hyundai was arriving with a bigger crossover with A V8. So if Genesis and that crossover will get a V8, it is possible that Amanti can get a V8. Because if you look at it, both Hyundai and Kia’s models would have a V8. So I think it’s possible.
April 15th, 2008 at 7:14 am
could they be talking about the already launched veracruz? it could be that you got some old news.
April 15th, 2008 at 2:27 pm
JTZ might be talking about the Terracan, an SUV that Hyundai has had since 2002 (according to Wikipedia) and might be matched to the Borrego. It’s based on the Mitsubishi Pajero, and from pictures looks to be about the same size as a Toyota Landcruiser. Hyundainews doesn’t mention any new SUVs, just the new Elantra Touring and 2 Genesis platforms.
April 15th, 2008 at 2:42 pm
O I know that terracan. That thing needed a refreshening.
April 15th, 2008 at 2:57 pm
Yeah, the pic they have on Wikipedia is 5 years old. I don’t know if that’s what JTZ is talking about, but it is a decent sized SUV that could be made on the Borrego platform (if it wasn’t already intended that way!).
April 15th, 2008 at 10:19 pm
Actually I heard that the Hyundai Portico concept was to go into production and was to be placed above the Veracruz.
April 16th, 2008 at 12:48 am
About the poll; I think more people would like the Kee if it was released in a better color. That yellow is terrible.
April 17th, 2008 at 9:48 pm
Well, Koup’s interior is more attractive to me.