Kia Concedes It Will Miss Its 2026 Profit Target

Kia said on October 30 that its 2026 profit will fall short of its target, after record third-quarter sales yielded an operating margin of just 5.8 percent. The company kept its sales goal of 3.35 million vehicles but blamed higher raw material costs, the Middle East conflict and heavier discounting for squeezing its margin.

Revenue for the July-September quarter rose 10.1 percent from a year earlier to 31.60 trillion won, and operating profit rose 24.3 percent to 1.82 trillion won. Net income fell to 1.29 trillion won. Kia’s average exchange rate for the quarter was 1,423 won to the dollar, which puts revenue at about $22.2 billion, operating profit at about $1.28 billion and net income at about $903 million. Global wholesale sales rose 7.9 percent to 847,355 vehicles, a third-quarter record.

Kia released the results ahead of its earnings call in Seoul. Net income was down 9.6 percent from a year earlier, according to a StockHub summary of the regulatory filing, even as operating profit rose, and the 5.8 percent margin was well below the 8 percent Kia earned in the second quarter. The year-over-year gain in operating profit came almost entirely from a lower US tariff: Kia said the cut in the US auto tariff from 25 percent to 15 percent was worth about 530 billion won against the same quarter of 2025, when the higher rate was in force, and it estimated its margin would have been about 8 percent without the tariff at all.

The target Kia gave up on was 10.2 trillion won of operating profit for the year at an 8.3 percent margin, MoneyToday reported. "We expect profitability to fall short of the figures we previously communicated," Kim Seung-jun, a vice president in Kia’s finance division, said on the call, according to the outlet’s second report, adding that "it will be difficult for profitability to dramatically turn around in the fourth quarter as well."

The US was Kia’s strongest market. Its American retail sales rose 7.8 percent to about 234,000 in a market that shrank 1.3 percent, giving it a 5.8 percent share, its highest for any quarter. US hybrid sales jumped 118 percent to about 69,000 against 27 percent growth for the hybrid market as a whole, and Kia said its share of American hybrid sales reached 10.6 percent, citing Autodata, the first time it has passed 10 percent since it entered the US hybrid market in 2011. Kia credited the new Telluride Hybrid and local production of the Sportage Hybrid, which Kia said in July is the first Kia built at Hyundai Motor Group Metaplant America in Georgia.

Kia listed the costs in detail. Incentives and price cuts took about 727 billion won off operating profit compared with a year earlier, which Kia tied to bigger incentives and price cuts on electric models in Western Europe and Korea, and raw materials and the Middle East conflict cost another 570 billion won or so, which Kia said equals 1.9 points of margin. Higher volume added about 442 billion won and the weaker won about 529 billion won. The cost of sales rose 3 points to 84.1 percent of revenue, while selling and administrative costs fell 3.7 points to 10.1 percent thanks to a 920 billion won drop in warranty expenses.

For the fourth quarter, Kia said it will launch the Seltos Hybrid in the US and expand production capacity for the Telluride Hybrid, and it will push hybrids in Korea and electric models in Western Europe. "If external factors such as rising raw material prices and instability in the Middle East are resolved, we will quickly restore profitability on the strength of our solid vehicle business," Jeong Seong-guk, Kia’s head of investor relations and strategic investment, said in Korean in the release. The results follow Hyundai’s third-quarter report a day earlier, in which Hyundai cut its own full-year forecast.

The HyundaiHQ Take

Kia is selling more cars than ever in America and making less on each of them, and the honest admission that the 10.2 trillion won goal is gone is better than the hedging Korean automakers usually offer. For US shoppers the useful part is the plan: a Seltos Hybrid arriving to fight the Toyota Corolla Cross Hybrid and more Telluride Hybrids coming off the Georgia line, which is where Kia’s American growth is coming from. The incentives that hurt the quarter were mostly spent in Europe and Korea, so American buyers should not expect the same generosity on the hybrids that are already selling this well.