Kia logged a record-high revenue of more than 114 trillion won last year. But operating profit came to 9 trillion won, down nearly 30% from a year earlier. The drop was due to more than 3 trillion won in profit lost to U.S. tariff payments last year. For this year, the company set a goal of selling 3.35 million vehicles, nearly 7% more than last year, and returning operating profit to the 10 trillion won range.
Kia said on the 28th that last year's revenue totaled 114.1409 trillion won. That was up 6.2% from a year earlier, marking not only a second straight year above the 100 trillion won level but also an all-time high. Wholesale sales for the year were 3,135,873 units, a 1.5% increase from a year earlier. The fact that revenue grew faster than volume means the company sold more expensive cars, such as eco-friendly models.
Profitability, however, worsened. Operating profit fell 28.3% from a year earlier to 9.0781 trillion won last year. From 2021 (5.1 trillion won) through 2024 (12.6671 trillion won), the company set record highs for four consecutive years, but ultimately turned to a decline. The operating margin, a key profitability metric, was 8.0%, down 3.8 percentage points from the record-high in 2024.
U.S. tariffs dragged down Kia's operating profit. Kia estimated that operating profit decreased by 3.092 trillion won through the end of the year due to U.S. tariffs that began in April last year. Kim Seung-jun, head of finance at Kia, said, "Although the U.S. tariff rate was retroactively adjusted to 15% as of Nov. 1 last year, the effect of the 15% rate did not actually appear until late November because the U.S. sales subsidiary held inventory subject to the 25% tariff."
On top of that, weak sales in parts of Europe and higher competition expenses also contributed to the decline in operating profit. By region in the fourth quarter, sales in North America and India rose 2.5% and 40.9%, respectively, from a year earlier, while sales in Europe fell 10.2%. Yoon Byung-ryeol, Kia's IR Head of Team, said, "Sales in Western Europe were sluggish due to the aging of existing internal combustion engine models such as the Sportage."
◇ Targeting 122.3 trillion won in revenue and 10.2 trillion won in operating profit this year
Kia set an annual sales target of 3.35 million vehicles this year, up 6.8% from last year. It projected annual revenue to rise 7.2% to 122.3 trillion won, with operating profit of 10.2 trillion won and an operating margin of 8.3%. That would be improvements of 12.4% and 0.3 percentage point from last year.
Kia said, "Despite U.S. tariff application and increased expenses from intensifying competition, we will continue policies for profitability recovery and growth based on average selling price (ASP) gains driven by expanded sales of eco-friendly cars."
By region, U.S. sales are set to increase 4.6%. The company plans to sustain SUV- and hybrid-centered growth by adding new hybrid models to new cars such as the Telluride and Seltos. In Europe, it presented a growth target of 11.1%. With the launch of the EV2 early in the year, it will complete a mass-market EV full lineup extending to the EV3, EV4 and EV5 to target the market. A Hyundai Motor official said, "This is an important milestone in Europe where, for the first time, electric vehicle sales exceed gasoline car sales."
In India, the goal is 7.8% growth by capturing premium SUV consumers with the new Seltos at the forefront. A Hyundai Motor official said, "We aim to expand production by increasing regional complete knock-down (CKD) bases in the Asia-Pacific, Indonesia and Malaysia."
Although operating profit decreased, the company will continue to expand shareholder returns. This year's shareholder dividend is set at 6,800 won per share on an annual basis, up 300 won from 2024. The total shareholder return (TSR) rose from 33.4% in 2024 to 35% last year.