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Kia Motors Corp., South Korea's second largest carmaker, reported an on-year rise in its profits in 2016, mainly led by brisk sales of its new cars and recreational vehicles (RV), and vowed to sell 3.17 million cars across the globe this year.
The company announced on Thursday that its full-year net profit in 2016 has risen 4.7 percent to 2.75 trillion won ($2.21 billion) from the previous year. Operating profit has increased 4.6 percent to 2.46 trillion won, snapping the three-year losing streak since 2012 when its operating profit peaked at 3.52 trillion won, and sales have added 6.4 percent to reach 52.71 trillion won.
The company said the launch of its compact hybrid sport utility vehicle (SUV) Niro and new K7 sedan, as well as a rise in its RV sales have helped boost the company's sales and profits last year.
But its net profit in the October-December period has plunged 25.7 percent to 320 billion won ($276.3 million) from a year ago. Operating profit has gained 3.5 percent to 532.2 billion won over the same period and sales have edged up 1 percent to 12.91 trillion won.
Market analysts blamed the lengthy strikes by the company's labor union in the second half of last year for the fall in the net profit as a series of local production halts increased costs.
The company has shipped 3.02 million units across the globe in 2016, 1.0% lower than 2015's shipments and shy of its goal of 3.12 million. It set this year's sales target at 3.17 million units, pinning hopes on new cars such as the Morning, the Sportage and the Stinger.
In particular, the Stinger is expected to help improve the company's profitability once the coupe-style sports saloon with a pricey sale tag hits the market, Han Cheon-soo, chief financial officer at Kia Motors.
In the U.S. market where compact SUVs and high-performance mid- and large-sized sedans are forecast to gain popularity this year, the company aims to sell 699,000 units, up 7.9 percent from 2016, by launching the Niro, the new K7 sedan and the Stinger.
It also plans to up its sales in China, where auto demand is slowing, to 690,000 units this year from 657,000 units last year, with the K2 and the new Forte sedans. It will also introduce mid-size SUV KX7 in March and add five SUV line ups by the end of next year to meet the rapidly growing demand for SUVs in the nation. The country's SUV market has been growing at an annual growth rate of about 40 percent. China and the U.S. are the world's two largest auto markets.
In the local market where import cars have been steadily eating away at Kia Motors' market share, it vowed to sell 515,000 units this year. It has sold 533,000 units in the Korean market last year.
The company also said it will pay its shareholders an annual cash dividend of 1,100 won per share for 2016. Total dividend amount is 441 billion won.
Shares of Kia Motors closed up 0.7 percent, or 250 won, at 37,750 won on Thursday.
