Kia Reports 24% Q2 Profit Drop Amid US Tariffs, Reshapes US Sales

Kia Corp reported a 23.3% drop in its second-quarter net profit, largely due to the 25% U.S. import tariffs imposed in April, which reduced operating profit by 786 billion won ($570 million). Despite a 6.5% increase in sales revenue and a 5% rise in U.S. sales as customers anticipated tariff-related price hikes, the operating profit margin fell to 9.4%, marking its lowest in 10 quarters amid intensified competition and increased incentives in other markets. To mitigate the tariff impact, Kia is shifting vehicles produced at its Georgia plant primarily to U.S. customers and redirecting Korean-made vehicles away from the U.S. market to regions like Canada, while also cutting retail incentives. The company remains optimistic about boosting its U.S. market share to over 6% in the second half of the year, driven by new hybrid and gasoline models like the Carnival hybrid and K4 small car. Eco-friendly vehicle sales rose 14%, accounting for 23.4% of total sales, fueled by strong demand in the U.S. and Europe. However, Kia expects the second half of 2025 to be more challenging as the full impact of the tariffs takes hold.