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Kia Corp. wants to increase sales of electric vehicles so they account for 9% of revenue by the end of the year, up from 5.5% last quarter.
Kia is part of Hyundai Motor Co., which this month committed to spending about 24 trillion won ($18 billion) to lift production of EVs to 1.5 million a year by 2030. Hyundai has set itself a goal of being one of the world’s top three EV makers, with 31 models across its brands by the end of the decade.
Kia Executive Vice President Woo Jeong Joo mentioned the 9% revenue target in an earnings call Wednesday after the automaker said its operating profit for the quarter through March jumped 79% from a year earlier to 2.9 trillion won, beating analysts’ estimates. Revenue rose 29% to 23.7 trillion won and Kia’s operating margin was 12%.
Easing chip shortages and the popularity of models such as sports-utility vehicles in US spurred growth, Joo said. The company is maintaining “strong control” over incentives to dealers to lower costs, Joo said. Kia’s average US incentive spending was 52% lower than the first quarter last year, Bloomberg Intelligence said, citing TrueCar.
“Dealers in US are favoring our cars,” Joo said. “We are trying to get the right prices.”
Kia’s US sales jumped about 22% from a year earlier to 184,000 vehicles, while in India and Western Europe they rose 24% and 2%, respectively. China sales plunged 38% and Russia sank 67%. Kia sold 768,251 cars in total globally.
“Despite weak global economies, its Sportage SUV has stoked US demand while the Sonet SUV and Carens MPV boosted sales in India,” Bloomberg Intelligence analyst Steve Man wrote in a note.
Kia said it is seeking to increase EV sales in China — the world’s biggest car market — to 20% of revenue in the country by 2025. The EVs will be produced at its plant in Yancheng.
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