Kia quadruples profit on Korean, Chinese sales

Kia Motors Corp., South Korea's second-biggest carmaker, more than quadrupled quarterly profit to the highest since 2003 as domestic and Chinese sales allowed it to avoid the worst of a global auto market meltdown.

Net income jumped to 347.1 billion won ($278 million) in the three months ended June from 86 billion won a year earlier, the company said in an e-mailed statement today. That beat the 157 billion won median of 23 analyst estimates compiled by Bloomberg. Sales rose 11 percent to 4.68 trillion won.

Chairman Chung Mong Koo boosted global vehicle sales 11 percent on demand for new models, including fuel-efficient Forte and Soul small cars, as well as rising sales in China and South Korea. Affiliate Hyundai Motor Co. also posted record earnings in the period, even as slumping U.S. demand pushed General Motors Corp. and Chrysler LLC into bankruptcy.

"Hyundai and Kia are differentiating themselves from the bigger players," said Kwak Tai Ho, who helps manage $250 million worth of equity assets at Kyobo AXA Investment Managers Co. in Seoul as an analyst. "A weaker local currency helped them, but it's more than just that."

Seoul-based Kia fell 2.4 percent to 16,150 won at 10:07 a.m. in trading in the city, compared with the benchmark Kospi index's 1.2 percent drop. The stock has more than doubled this year, outperforming the Kospi index's 39 percent advance.

Rising Sales

The automaker delivered 428,615 vehicles in the second quarter. Sales in China jumped 52 percent while domestic sales climbed 13 percent. In both countries, government stimulus measures spurred demand for fuel-efficient vehicles.