April 25, 2024

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[THE INVESTOR]  Kia Motors is banking on new car launches in China in an attempt to offset some of its sales loss hit by the ongoing political tension between Beijing and Korea. 

“We are planning to launch the new Pegas compact sedan and K2 Cross SUV in September and revamped K4 sedan in November to boost sales in China,” said Kia Motors CFO Han Chun-soo during a conference call after the automaker’s second-quarter earnings report. 

“Kia will focus on expanding marketing campaigns and work with dealers to regain sales in the country.”

In the January-June period, Kia’s sales in China plummeted 41.5 percent on-year to 166,000 units, in contrast to the industry-wide increase of 1 percent. 

The sales decline in the world’s largest car market is due to heightened Chinese consumer backlash over Seoul’s decision to deploy the US-led THAAD missile system, according to the carmaker. 

Kia said it is putting all-out efforts to win back Chinese consumers. 

“We have formed a China task force that covers all areas, including sales, research and design, brand strategy and product, to improve our brand in the country,” said Han. 

Dragged down by sales decline in its major market, Kia’s overall operating profit plummeted 47.6 percent on-year to 404 billion won (US$362.88 million) in the second quarter. 

Revenue dropped 6 percent to 13.58 trillion won, while net profit slumped 52.8 percent to 389.6 billion won. 

In the April-June period, Kia sold 660,264 units in Korea and overseas, down 12.2 percent from a year earlier. 

As for the first half of this year, Kia sold 1.32 million units, down 9.5 percent on-year.

By Ahn Sung-mi (sahn@heraldcorp.com)