Chapter 2: Company Profile

Introduction about KIA Motors:

 Founded December 11, 1944

 Parent Hyundai Motor Group
 The company is 33.88% owned by the Hyundai Motor Company
 Headquarters Seoul, South Korea Area served Worldwide
 Key people H-Keun (Hank) Lee, Vice Chairman and CEO, Peter Schreyer Chief Design Officer
 KIA Establishment in INDIA is May 19, 2017
 Plant Location: Anantapur District. Andhra Pradesh
 Product on Capacity 300,000 units annually
 Site Area 23 million square feet (2.16 Km or 536 acres)
Kia Corporation, commonly known as Kia (Kyungsung Precision Industry and Kia Motors Corporation), is
a South Korean multinational automobile manufacturer headquartered in Seoul. It is South Korea's second
largest automobile manufacturer after parent company Hyundai Motor Company, with sales of over 2.8 million
vehicles in 2019. As of December 2015, the Kia Corporation is minority owned by Hyundai, which holds a
33.88% stake valued at just over US $6 billion. Kia in turn is a minority owner of more than twenty Hyundai
subsidiaries ranging from 4.9% up to 45.37%, totaling more than US $8.3 billion.

Operating Position:

 According to Moody's report American business and financial services company, the current operating
position of KIA Motors is comparatively weaker than the results for 2016.
 Although it had not immediately effected the Baal issuer rating of the automobile manufacturer or the
rating’s steady position.
 It has been observed that slow growth in auto shipments, high incentive expenses and strong won (W)
are the key reasons behind the weak operating performance of KIA Motors.
 The combined operating income of KIA saw a drop of 38% to KRW1.54 trillion; this excludes the one-
off provision expenses with reference to standard wage lawsuit in Korea from KRW2.46 trillion in 2016.
 The operating margin of the car-maker in 2016 fell to 2.9% from 4.7%.
 The extent of year-on-year slump in its pre-tax profit for 2017 was more critical at 67% due to weak
equity income and provision expenses in relation to the ordinary wage lawsuit i.e. about KRW1 trillion.
 In 2017 a negative 0.9% was registered in the unit shipment that excluded its joint venture sales in
China.

 KIA is 5th largest automobile manufacturer globally, and is subsidiary of Hyundai Motor Company.
  It produces more than 1.4 million vehicles annually from its 14 manufacturing and assembly operations
spread over 8 countries.
 With more than US $17 billion annual revenues, the company has a workforce of more than 50.000
employees.
 3 major vehicle assembly plants the Hwasung, Sohari and Kwangiu facilities are operated by KIA in
South Korea.
 A world-class R&D centre at Namyang employs 8000 technicians along with a committed
environmental R&D centre.
 The No. 2 car maker only behind Hyundai Motor in South Korea, the automobile line-up of KIA
includes Picanto. the country’s second-best selling car followed by k-series sedans, Sorrento SUV and
Forte.
 US is KIA's single largest market although t produces more than half of the vehicles in South Korea.
 Total assets of KIA as of 2017 is W 52, 254bn whereas the total revenue W 53, 536bn.

History of KIA Motor:

Originally, Kia Motors was known as Kyungsung Precision Industry that produced steel tubing and parts of
bicycle. The company progressed to manufacturing its very first domestic bicycle in 1951. It then changed its
name to Kia Industries in 1952 and ventured into making cars, motorcycles, and trucks from 1957. Kia Motors
had to shut down manufacturing passenger cars in 1981 due to the dictatorship of Chun Doo-Hwan who
enforced industry consolidation.

Kia entered the automobile arena again in 1986 through a partnership with Ford. It then went on producing
Mazda derived automobiles which were sold in South Korea as well as were exported to countries like America
and Australia. Beginning 1992, Kia started expanding one region at a time in America and by 1995.
Kia Motors was initially founded as Kyungsung Precision Industry in December 1944. Gradually, the name was
changed to Kia Industries. Presently, Kia Motors is headquartered in Seoul in South Korea and is the second
largest manufacturer of automobiles there. Kia Motors owns over twenty subsidiaries of Hyundai which
amounts to $8.3 billion USD.

Board of directors:

 Chung Eui-sun, Chairman of Hyundai Motor Group

 Song Ho-sung, CEO and President of KIA
 Jun-Young Choi, Executive Vice President of KIA
 Woo-Jeong Joo, CFO and Senior Vice President of KIA
 Sang-Koo Nam, Professor of Business Administration at Gachon University
 Kwi-Nam Lee, former Minister of Justice
 Chol-Su Han, former Director of Korea Fair Trade Commission
 Duk-Joong Kim, former Commissioner of National Tax Service
 Dong-One Kim, Professor of Business School at Korea University

KIA Motors Vision Statement:

 Establishing a robust marketing culture that permeates every level of the organization and within which
the distinct needs of customers are identified and met will continue to be our vision for the short,
medium and long term.
 KIA Motors vision is to blend cultures to become the best and most innovative automotive company in
the world by ensuring customer first and mutual prosperity of people. They believe they can achieve
their vision by creating the best in everything they do every day.
KIA Motors Mission Statement:

 KIA Motors mission is to produce the best vehicles exhibiting superior technology, quality, and value
through a spirit of continuous improvement, creativity, teamwork and value-based relationships. They
strive for perfection.

SWOT Analysis of KIA Motors:

1. Strengths in The SWOT analysis of Kia Motors:

Strengths are defined as what each business does best in its gamut of operations which can give it an
upper hand over its competitors. The following are the strengths of Kia Motors:
I. Product Portfolio: Kia Motors has a wide product portfolio with multiple offers in categories
like sedans, coupes, sports cars, passenger cars, SUV’s and crossovers. Some of their brands are
Optima, Forte, Sedona, Cadenza, Sorrento, and Niro.
II. Brand value: Kia is a valued brand across the world with an estimated value of 6.7 billion USD
which is up by 6.7 % from the previous years. The brands from the company have also been
consistently included in the top 50 brands of the world.
III. Positioning: Kia positions their cars as vehicles that can provide driving experiences that surpass
customer expectations. Their cars are also superior in terms of styling and performance.
IV. Hybrid cars: Kia Motors have introduced the hybrid version of their variants Cadenza and
Optima both popular brands globally. They are characterized by regenerative braking systems
and EV drive mode.
 V. Innovation: Kia Motors has not just been innovative in design and styling of their cars but have
also been involved in a lot of research on alternate energy vehicle options such as hybrid cars,
hydrogen cell powered cars, electric cars, and plug-in hybrids.
2. Weaknesses in The SWOT analysis of Kia Motors:
Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the
key weaknesses of Kia Motors are:
I. Poor reach: In comparison to competition Kia Motors has not been able to reach out to a wider
audience and has restricted itself to smaller and niche markets.
II. Brand Identity: Though a well-known brand in its home market, Kia Motors has been
struggling to build a brand identity or a positive image for itself in Europe and USA and has been
largely unsuccessful in doing that.
III. A shift of focus: Kia which was primarily focusing on fleet sales earlier have attributed their dip
in revenues to the decrease in demand for fleet vehicles and decided to reinvent themselves as a
retail car brand. This may not be a right strategy.
IV. Poor advertisements: The Company has been looking primarily at sponsorships of Formula 1
and other sporting events and ends up spending most of their promotional budget there with the
result that they are almost invisible in the retail market.
3. Opportunities in The SWOT analysis of Kia Motors:
Opportunities refer to those avenues in the environment that surrounds the business on which it can
capitalize to increase its returns. Some of the opportunities include:
I. Market potential: Research indicates that emerging markets are going to be huge future sources
of revenue for automakers. Markets like China and India are going to give more demand than the
USA or Europe.
II. Improved infrastructure: There has been a focused effort by governments of emerging
economies to improve the condition of the road and to enhance road safety. There has also been
an improvement in intercity connectivity through highways which in turn improves long distance
driving prospects as well.
III. Change of trends: The growing number of dual-income households, the increase in urban
migration, more women drivers on the road etc will all create a positive impact on car sales.
IV. Green cars: Kia Motors has invested a lot of money into research in alternate energy vehicle
options a cause that is being pioneered by a lot of governments and environmental activists.
These efforts will see fruit in the near future as the demand for hybrid, green and environment-
friendly cars pick up. This is an opportunity for the company.
 4. Threats in The SWOT analysis of Kia Motors:
Threats are those factors in the environment which can be detrimental to the growth of the business.
Some of the threats include:
I. Competition: There is high competition in the automakers market. The main rivals of the
company are Toyota, Honda, and Nissan.
II. Regulatory framework: With concerns like global warming and depletion of fossil fuels, the
regulatory framework for the automobile is likely to be made stricter and there may be a stringent
control on quality and environmental compliance. This may create an additional cost for
automakers..

Organizational Structure of KIA Motors in India:

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