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SEOUL—Kia Motors Corp. said Friday it expects sales growth to decelerate this year due to tougher competition overseas and weak domestic sales after it posted a 3.5 percent decline in fourth-quarter net profit.
The South Korea auto maker, in which Hyundai Motor Co. owns a nearly 40 percent stake, expects overall sales for 2012 to grow 9.5 percent to 2.71 million units, slowing from a 19 percent rise to 2.48 million units last year, reported The Wall Street Journal.
In overseas markets, where Kia sells eight out of 10 cars, Kia expects stiffer competition from rivals General Motors Co., Toyota Motor Corp. and Honda Motor Co., a company official said.
On the home front, demand is likely to remain weak, with more local customers increasingly showing a preference for imported cars due to lower prices, the official added. Kia continues to face headwinds in the domestic market, as sales are forecast to increase at a sluggish 1.7 percent pace to 500,000 units this year. In the fourth quarter, Kia said sales in South Korea fell 5.5 percent to 125,120 units.
Despite the lower sales forecast, Kia has set bold targets for its key U.S. and European markets, where Kia has increased its market share in recent years. Kia is aiming for 10 percent growth in sales to 534,000 units in the U.S. and a 23 percent increase to 356,000 units in European markets.
Kia reported consolidated net profit for the three months ended Dec. 31 fell 3.5 percent to 790.35 billion won ($702 million). Operating profit rose 17 percent to 825.79 billion won during the quarter, while sales were up 8.7 percent to 10.963 trillion won.
For 2011, net profit rose 30 percent to 3.519 trillion won while sales gained 21 percent to 43.191 trillion won.
At a conference call, Chief Financial Officer Lee Jae-rok said Kia plans to launch the K9 large-size sedan in the domestic market in the second quarter, adding the model will help raise the company's average selling prices. The company is targeting to sell over 2,000 units of the flagship sedan per month, Mr. Lee said.
For 2011, the average selling price for exported vehicles increased 11 percent to $13,100 per unit, while that for domestic vehicles inched up 1.8 percent to 18.6 million won.
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