Kia Sets Target of 6% U.S. Market Share in Second Half
U.S.-Produced Vehicles to Be Supplied Exclusively to U.S. Market
Korean Export Volume Redirected to Canada and Middle East
Responding with Reduced Incentives and Enhanced Mixed Production
Despite worsening market conditions in the United States due to tariff measures, Kia has set its target for U.S. market share in the second half of the year at the 6% range. Although the outlook for the U.S. market in the latter half of the year has become even darker, Kia expressed confidence that it could actually increase its market share by actively responding through flexible production site adjustments and expanding the proportion of hybrid vehicles.
During the 2025 second quarter earnings conference call on July 25, Kim Seungjun, Head of Finance at Kia, stated, "Our retail sales target for the U.S. market in the second half is 7% growth," and added, "Although our market share finished at 5.1% in the first half, we have established internal operational strategies to secure a market share in the 6% range in the second half."
Kia predicted that the situation in the U.S. market would become even more challenging in the second half due to the 25% tariff imposed on imported finished vehicles and the early termination of electric vehicle subsidies. However, Kia emphasized its flexible production and operational strategies and instead set a goal of expanding its market share in the second half. Kim stated, "Tariff imposition is a business environment faced by all finished vehicle manufacturers worldwide," and continued, "Rather than making excuses for external factors, we will use this as an opportunity to check our fundamentals and strengthen our profit-generating capabilities."
Response Measures to U.S. Tariffs
Kia's response measures to tariffs can be divided into three main strategies. First, the company will prioritize supplying U.S.-produced vehicles to the U.S. market by adjusting its production site strategy. Previously, Kia exported a portion (25,000 units) of its U.S. production to Canada, Africa, and the Middle East. Now, Kia will reduce exports from U.S. plants to overseas markets and instead supply Korean-made vehicles to the Canadian and Middle Eastern markets.
The second strategy is to reduce incentive costs. By cutting incentives by about $500 per vehicle, Kia expects to save approximately 600 billion KRW annually compared to its initial business plan. The final measure is to expand the production share of hybrids and internal combustion engine vehicles. With electric vehicle subsidies ending in the U.S. in September, EV sales may slow down. Instead, Kia plans to actively increase hybrid production. Leveraging its greatest strength?a mixed production system?Kia intends to respond proactively to the growing market demand for hybrids. Kim emphasized, "Although the market environment is negative, we will demonstrate our ability to achieve market share growth in a contracting market."
Tariff Impact in Q2: 786 Billion KRW...Operating Profit Drops Despite Record Half-Year Sales
Kia's operating profit in the second quarter was 2.7648 trillion KRW, a 24.1% decrease compared to the same period last year. Although the company achieved record half-year sales in terms of units sold, the impact of U.S. tariffs, which began in earnest in May, had a negative effect on profits.
The impact of tariffs on operating profit amounted to 786 billion KRW. Losses from tariffs were offset by increased sales volume, higher prices, and a favorable exchange rate environment.
Second quarter sales reached 29.3496 trillion KRW, up 6.5% from the same period last year. The operating profit margin was 9.4%. This is the first time in 10 quarters since the third quarter of 2022 that Kia's operating profit margin has fallen to single digits.
Second quarter sales volume was 814,888 units, a 2.5% increase year-on-year, but net profit (including non-controlling interests) was 2.2682 trillion KRW, a 23.3% decrease.
To overcome the difficult business environment in the second half, Kia plans to expand sales in Korea by utilizing hybrids such as the Sportage, Sorento, and Carnival. The company also aims to establish a full lineup of electric vehicles in the second half by launching new models such as the EV5 and PV5.
Kia plans to complete a full lineup of mass-market electric vehicles, including the EV2, EV3, EV4, and EV5, and add new hybrid models such as the Telluride and Seltos. Through continuous growth strategies such as entering new segments like purpose-built vehicles (PBV) and pickups, Kia intends to further expand its market dominance.
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