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Kia Motors says profit rises 36 per cent on cost cutting

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SEOUL, South Korea (AP) _ Kia Motors Corp., South Korea's second-biggest automaker, on Friday reported a 36 per cent rise in net profit for the second quarter on cost-cutting and strong domestic sales of the large-size Opirus sedan.

For the three months through June, Kia, an affiliate of Hyundai Motor Co., posted a net profit of 61.4 billion won (US$67 million), up from 45.1 billion won a year earlier.

``Increased domestic sales of the luxury sedan gave a boost to second-quarter results. About 2,000-2,500 units were sold a month, higher than 500 units (sold in a month) in the year-earlier quarter,'' said Kang Hyun-Geun, a company spokesman.

However, overall sales fell 7.3 per cent to 4.14 trillion won ($4.5 billion) from 4.46 trillion won a year ago.

The number of vehicles sold during the quarter slid 1.4 per cent to 289,334 units from 293,502 units in the same quarter in 2006.

The company's botton line did get a boost from the resumption of production at Kia's main Hwaseong plant, which was shut for a month in January for upgrading to produce the HM sport utility vehicle, the company said. The shutdown at the plant led to production losses of 22,000 Sorento midsize sport-utility vehicles.

``By launching the HM model later this year and wrapping up wage negotiations with the union as quickly as possible, Kia will try to post an operating profit for this year,'' Kia's Chief Executive Cho Nam-Hong said in a statement.

Kia's domestic market share fell to 22.2 per cent in the first half from 23.3 per cent a year ago.

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Kia Motors says profit rises 36 per cent on cost cutting
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