Kia makes a profit, but 80% less than last year
Kia might have strangely charming commercials, but that hasn’t translated to financial success this quarter. The Korean company saw their profits fall like a rock. Their net profits for the quarter ending on January 31 were $41 million, down 80% from the previous quarter.
The relatively dismal results were the result of factors largely out of their control. The Korean Won has been very strong in recent months, especially against the U.S. Dollar. That’s bad news for a company that relies so heavily on exports. The higher Won makes their cars relatively more expensive in foreign markets. If it weren’t for the currency issues, the results would have been far better. Sales for the quarter were up a respectable 11% over the previous year to $4.7 billion.
In an apparent attempt to avoid the currency problems, the company has a plant planned in Georgia (the state, not the country) that is scheduled to open in 2009. A European factory in Slovakia will open later this year, as will a second factory in China.