“Kia Corporation’s global market share hits an all-time high ... EV profitability also set for a turnaround” — Hana Securities

[Financial News] Despite slowing demand in the global auto market, Kia Corporation is increasing both sales and market share, expanding its growth base. Sales of electric vehicles (EVs) and hybrid electric vehicles (HEVs) have risen sharply in particular, accelerating the company’s shift toward eco-friendly vehicles. While higher raw material prices and sales incentives continue to weigh on it in the short term, the company plans to pursue a recovery in profitability starting next year by cutting EV costs and expanding its hybrid lineup.
According to a corporate analysis report on Kia Corporation released by Hana Securities on the 2nd, the company’s global wholesale sales in the third quarter of this year rose 7.9% year over year to 847,000 vehicles. Sales in global markets also increased 6.9% to 829,000 vehicles. Its share of the global market climbed from 3.5% to 4.0%, an all-time high. Excluding China, its market share reached 5.0%.
By region, Kia Corporation’s market share in the U.S. reached 5.8%, a quarterly record. Its share in South Korea also rose 4.6 percentage points to 36.8%, while it stood at 4.0% in Western Europe. In India, wholesale sales surged 38.5%, driven by increased sales of the Kia Seltos and Kia Sonet.
Growth in eco-friendly vehicles was also notable. Sales of these vehicles in the third quarter totaled 300,000, up 47.0% year over year. Hybrids accounted for 172,000, up 46.0%, while EVs totaled 123,000, up 75.4%. The 118% increase in U.S. hybrid sales and 163% rise in Western European EV sales also stand out.
Buoyed by higher sales, revenue in the third quarter rose 10.1% to 31.597 trillion won. Operating profit also increased 24.3% to 1.818 trillion won. However, amid higher raw material prices, the conflict in the Middle East and increased EV sales incentives, the operating margin fell 2.2 percentage points from the previous quarter to 5.8%.
Kia Corporation plans to maintain its strategy of expanding EV sales despite short-term pressure on profitability. The company believes it is important to secure market share early, as Europe’s auto market is rapidly shifting toward EVs.
To that end, the company plans to cut the costs of batteries, motors, thermal management and power electronics (PE) systems by around 10% annually over the next three years. Its plan is to bring EVs’ total cost of ownership competitiveness up to the level of internal combustion engine vehicles in 2027–2028, and to improve profitability by achieving economies of scale.
Hybrids are also a key pillar of earnings resilience. Expanding the hybrid lineup with models such as the Kia Telluride, Kia Sportage, Kia Seltos and Kia Sorento is expected to improve the sales mix and profitability.
Hana Securities said the pressure from the conflict in the Middle East and rising raw material prices could continue through year-end, but Kia Corporation’s profitability may return to normal next year as external headwinds ease, sales increase and hybrids make up a larger share.
[email protected] Kim Dong-ho Reporter