U.S. News

Kia Motors Swings to Fourth-Quarter Loss on Won, Marketing


South Korea's No.2 automaker Kia Motors swung to a quarterly loss, hit by a stronger won and higher marketing costs.

Kia, an affiliate of top South Korean automaker Hyundai Motor, reported a net loss of 200 million won (US$213,800) in the fourth quarter, compared to a revised 263.7 billion won a year earlier and a 43.9 billion net loss in the previous quarter.

The result widely missed a consensus forecast for 57.5 billion won profit in a Reuters poll of seven analysts.

Kia's earnings are expected to improve this year, helped by lower raw material costs and as output ramps up from its new  Slovakia plant, lessening currency-related risk.

Still, many analysts predict Kia will face a challenging 2007 due to heavier spending on marketing and as a firmer won currency will keep putting pressure on the company, which sells about 80 percent of its vehicles abroad.

Shares in Kia, which has a market value of $4.32 billion, fell 12.4% in the fourth quarter, underperforming a 4.6% fall in the broader market.