Kia posts record quarterly sales and revenue in Q2, but operating profit falls 4.9% (roundup)

Kia said on the 24th that both sales and revenue in the second quarter of this year set new quarterly records. The gains came as the company sharply increased sales of electrified vehicles despite a slowdown in global auto demand. However, intensifying competition pushed up incentive spending, while a weaker won added to costs, dragging down operating profit and making profitability management a key task for the second half.
Kia released its consolidated results for April through June on the 24th. According to the announcement, the company posted wholesale sales of 851,639 units in the second quarter, revenue of 33.037 trillion won, operating profit of 2.6285 trillion won, pretax profit of 3.0681 trillion won, and net profit of 2.3278 trillion won.
Compared with the same period last year, sales volume rose 4.5% and revenue increased 12.6%. Operating profit, however, fell 4.9%, and the operating margin narrowed by 1.4 percentage points to 8% from 9.4%.
The main driver of revenue growth was higher average selling prices. As the share of hybrid and electric vehicles rose in the United States and Europe, the average price per vehicle increased, and revenue growth of 12.6% far outpaced the 4.5% rise in sales volume. Operating profit, by contrast, was hit by cost pressures. Kia increased price discounts and sales incentives in South Korea and Western Europe, where competition with Chinese EV brands has intensified, and the weaker won also raised the won-denominated cost of warranty expenses.
The cost of sales ratio stood at 81.7%, up 1.7 percentage points from a year earlier. Excluding the impact of U.S. tariffs, however, the ratio would have fallen below 80% to 79.2%. The selling and administrative expense ratio improved by 0.3 percentage point to 10.3%.
The operating margin, which had fallen to 5.1% in the third quarter of last year after the imposition of U.S. tariffs, rebounded for a third straight quarter, rising to 6.6% in the fourth quarter, 7.5% in the first quarter of this year, and 8% in the second quarter.
A Kia official said, "Unlike last year, when we struggled somewhat on the earnings side due to the impact of U.S. auto tariffs, this year we are seeing a recovery in our underlying profit-earning capacity."
Of the 851,639 global wholesale units sold in the second quarter, 154,816 were sold in South Korea, accounting for 18.2%, while 696,823 were sold overseas, or 81.8%. Actual global retail sales reached 839,000 units, up 5.8% from a year earlier.
Global auto demand fell 3.8% amid instability in the Middle East and weaker consumer sentiment in China, but Kia increased sales against that trend. Its global market share in the second quarter rose from 3.7% to 4%. On a first-half cumulative basis, that is the highest level ever, and excluding China, the share reaches 5%.
By region, sales in South Korea reached 154,000 units, supported by stronger demand for the Kia EV3, Kia EV5, and the purpose-built vehicle (PBV) PV5. In the United States, sales totaled 224,000 units, helped by the new Telluride and steady popularity of the Kia Sportage and Kia Sorento. Western Europe recorded 151,000 units, as the Kia EV2 launched in the first quarter was joined by the Kia EV4, Kia EV5, and PV5, which began selling in earnest from the fourth quarter of last year. The increase was more than double the local market growth rate of 4.8% over the same period.
The record quarterly sales were driven by expanding electrified vehicle sales. Second-quarter retail sales of electrified vehicles reached 296,000 units, up 60% from a year earlier, and their share of total sales rose by 11.9 percentage points to 35.3%.
By model type, electric vehicles posted the sharpest growth among electrified models, with sales up 88.4% to 110,000 units. The launch effects of mass-market models such as the Kia EV2, Kia EV4, and Kia EV5, along with the debut of the PBV PV5, drove the increase. In South Korea, EV sales more than doubled to 38,000 units, lifting the EV share of total domestic sales from 11.9% last year to 24.5% this year. Over the same period, EV sales in Western Europe also rose 101.5% to 52,000 units.
Hybrid vehicle sales climbed 61% to 178,000 units, helped by established favorites such as the Kia Sportage, Kia Sorento, and Kia Carnival, as well as the new Telluride and Kia Seltos hybrid. In the United States alone, sales surged 151.6% to 66,000 units, pushing hybrids to 29.6% of total local sales, close to 30%.
Kia said it expects solid results and the achievement of its annual guidance in the second half, supported by new-model competitiveness and demand for EVs and hybrids. In Europe, the company expects continued momentum from new EV models, while demand in the Middle East is also expected to recover somewhat.
In the United States, Kia plans to raise profitability by expanding Telluride production capacity. It will also begin delivering the Sportage Hybrid, the first Kia model produced at Hyundai Motor Group Metaplant America (HMGMA), to customers in the second half. The Kia EV3 made in Mexico will also be introduced to the U.S. market in the second half.
In Europe, Kia will produce the Kia EV2 and Kia EV4 locally to improve price competitiveness, while targeting the commercial vehicle market with the PV5. The company also plans to launch hybrid versions of the Kia Seltos and Kia K4 in Europe. In emerging markets such as India and Latin America, it will continue to introduce locally tailored models and expand supply. In South Korea, Kia aims to defend its No. 1 position in EV market share and set a new annual record for EV sales by boosting mass-market models such as the Kia EV3, Kia EV5, and PV5.
Jung Seong-guk, executive vice president in charge of IR and strategic investment at Kia, said, "We will continue to maintain solid earnings power by improving our sales mix toward higher-value vehicles and making multifaceted efforts to cut costs."
[email protected] Kim Dong-chan Reporter