In 2021, Kia achieved its highest annual performance in the face of global semiconductor supply shortages. This is due to the increase in sales of high value-added vehicles such as electric vehicles and SUVs.
Kia announced on June 26 that its full-year sales last year were 69.86 trillion won (369.177 billion yuan) and operating profit was 5.657 trillion won (29.894 billion yuan). This is the highest level since the introduction of the new accounting standard (IFRS) in 2010.
Sales increased by 18.1% compared to the previous year due to higher sales of high-margin SUV models and new vehicles. That's an 18 percent increase from the record high of 59,168.1 billion won (312,675 million yuan) set in 2020.
Operating profit increased by 145.1% over the previous year, mainly due to the impact of the quality cost base effect of the previous year, the increase in sales volume and structural optimization caused by the increase in unit price, and the reduction of incentive measures. The operating margin was 7.3%.
In terms of vehicle sales, sales in The Korea market decreased by 3.1% y/y to 530,016 units, and overseas sales increased 9.1% y/y to 2,776,359 units, up 6.5% y/y.
Kia said: "Annual sales increased year-on-year due to higher sales of high-margin recreational vehicles (RVs) and new vehicles, improved product portfolios and increased sales of eco-friendly vehicles. The improvement in overall profitability, such as incentives and incentives, formed a virtuous circle, which improved from the previous year, with an operating margin of 7.3%. ”
Regarding this year's business environment, Kia expects global demand for cars to recover as the impact of the pandemic eases, despite concerns that inflation and increased competition among large companies will lead to a decline in consumer purchasing power. In particular, the eco-friendly car market, mainly electric vehicles, is expected to expand significantly.
Therefore, Kia plans to increase profitability by expanding production to address the backlog of shipments as the semiconductor supply and demand situation improves, thereby achieving a substantial increase in sales, while promoting profitability based on the improvement of brand and product characteristics.
Kia plans to expand sales of eco-friendly cars such as the EV6 and the new Niro and shift its focus to electric vehicles. In the medium to long term, Kia plans to ensure profitability by expanding the production and sales of electric models and realize new revenue and new business areas such as software/services.
The relevant person in charge of Kia said, "Sales in the fourth quarter of this year have declined due to insufficient inventory, but as demand remains strong, new orders for major models continue to increase, and sales will naturally recover after production normalization." "We will focus on expanding sales of electric vehicles such as the EV6 and the new Niro, which will be sold globally, including launches, as well as the globally popular sporting models."