Kia is quite a dominating force in the domestic automotive market. Within South Korea itself, it was able to secure three out of the five best-selling vehicles, with the Sportage, Sorento, and Carnival as top performers. On the global front, Kia is also kicking dust onto other car manufacturers. Their vehicles are reliable, stylish, and jam-packed with features, making them a force to be reckoned with.
Expanding on the overall U.S. front
South Korea’s Kia Corp 000270.KS said on Friday that it aims to increase its U.S. sales and market share in the second half, driven by sales of new hybrid and gasoline vehicles and as some rivals are expected to raise prices to cope with tariffs. Kia, which together with affiliate Hyundai Motor 005380.KS ranks as the world’s no. 3 carmaker, said its operating profit in the second quarter slumped by a quarter as it took a hit of 786 billion won ($570 million) from U.S. tariffs and warned of a bigger blow in the second half.
Still, it increased April-June U.S. sales by 5% as consumers brought forward some car purchases due to concerns that U.S. tariffs would lead to higher vehicle prices. Kia also credited solid sales of its new Carnival hybrid sport utility vehicles for the rise. The Kia Carnival released the first-ever hybrid powertrain with its 2025 model. This MPV is an ideal family car with an appearance that mimics that of an SUV. The hybrid model has a 1.6-liter turbocharged four-cylinder engine.
Targeting the correct global market
Kia said it aimed to increase its U.S. sales by 7% to 8% in the second half of the year, even as overall auto sales in the U.S. market are expected to slump by 10%, leading to a gain in market share to over 6% from 5.1% in the first half. It expects Carnival and K4 small car sales to drive the gains, while some Japanese automakers are raising prices.
While Kia and Hyundai import about two-thirds sold in the U.S. market, making them more exposed to U.S. tariffs than major rivals, Kia said on Friday that it has not yet made detailed plans to raise prices, instead focusing on growing its U.S. business.
“We believe that we will be able to use the difficult environment as a good opportunity to level up (our market share and sales), and that’s Kia’s strength.”
Kia Chief Financial Officer Kim Seung-jun said during a conference call. Samsung Securities analyst Esther Yim said Kia’s strategy to boost sales of hybrids, which are imported from South Korea, could weigh on its profit, but that could be in part offset by Kia’s efforts to limit the impact.
Long-term goals for the Kia brand
To mitigate tariffs’ effects, Kia’s South Korean factories will divert some of its shipments from the United States to other markets, such as Canada, the carmaker said. Kia South Korea has one design center, which is located within Hwasesong. In terms of manufacturing facilities, South Korea boasts an impressive four. Autoland Gwangmyeong or previously known as the Sohari Plant, is located within Soha-dong in Gwangmyeong.
Autoland Gwangju to Hanam factory is based in Gwangju, Seosan Plant is situated in Seosan, and Autoland Hwasung with operations in Woojeong-myeon, Gyeonggi Province. Kia also said its U.S. factory in Georgia aims to shift some electric vehicle production to other vehicles like Sportage, Sorento, and Telluride, as the United States is set to end its EV subsidies at the end of September.
The potential 25% tariffs on imported vehicles seem to have been the driving force behind Kia and Hyundai Motors’ revised production and sales strategy for the U.S. As expectations are for these tariffs to take effect later during the year, the Motor Group has decided to prepare a contingency plan for this. Directed at the U.S. market, it aims to increase production of sales and parts.