Kia Motors' Q4 profit rises on strong new models sale

SEOUL - Kia Motors said Wednesday that its fourth-quarter operating profit rose on the back of strong demand for its new models of sedan and sports utility vehicle.

Operating profit reached 514.4 billion won ($428 million) during the October-December period, up 2.8 percent from a year earlier, the South Korean carmaker said. It marked the second quarterly growth.

Revenue increased 9.3 percent from a year earlier to 12.79 trillion won in the fourth quarter, but net income shed 1.2 percent to 430.8 billion won.

The increase in operating profit and revenue came as new K5 sedan and Sportage sports utility vehicle, rolled out in the third quarter, sold well in the second half.

Solid demand for recreational vehicles such as Sorento and Carnival contributed to the rise in revenue.

The net income, however, reduced on unfavorable foreign exchange rates in emerging markets.

For the whole year of 2015, Kia's operating profit declined 8.5 percent to 2.35 trillion won as auto sales in the first half were lackluster.

The 2015 revenue expanded 5.1 percent to 49.52 trillion won, but net profit tumbled 12.1 percent to 2.63 trillion won.

Kia plans to launch new models and start operating its Mexican factory from May to overcome stiffer competition amid the expected slowdown in emerging economies and slump in advanced markets.

The company, affiliated with South Korea's top automaker Hyundai Motor, began selling its new K7 sedan in the domestic market from Tuesday, while planning to roll out a model targeting only the eco-friendly car market in the first half of this year.

Kia set its 2016 sales target at 1.63 million at home and 1.49 million abroad, up 2.3 percent from the prior year.