Kia 2002 Annual Report Download - page 6

To Our Shareholders
Kia Motors achieved record-breaking results despite difficult circumstances in 2002. We sold 897,722 finished vehicles and
our sales revenue totalled 14.056 trillion, up 13.8% from 2001. Net income also increased 16.2% year on year to 641.4
billion. This success is the result of focusing extensively on profitability. 2002 marked the first year of absolute profitability
while paying out stock dividends for the first time in seven years. Our financial structure has steadily strengthened as well
with debt-to-equity ratio falling from 149% at the end of 2001 to 123% in 2002.
The Kia Sorento is truly the star of our new 2002 lineup. Since its launch, the mid-sized SUV has been a huge hit with
drivers around the world and has elevated the Kia brand image as a whole.
In Korea, our innovative Q-service brand, introduced last year as part of our ongoing efforts to improve customer
satisfaction, resulted in Kia being recognized as the number one company for customer service in our home market. The same
commitment to customer service have also seen results in our overseas operations, with Kia being recognized as the most
improved brand in the annual J.D. Power & Associates Initial Quality Study. Our quality initiatives have just begun and we
expect to see even better results in the future.
2002 was a landmark year for many other reasons as well. The Kia TianLiMa became the first Korean automobile to be
produced in China for domestic sale. We also began work on expanding output capacity at our commercial vehicle plant in
Kwangju, Korea to 300,000 units, reflecting an increased focus on international sales of our commercial range.
And through the successful sponsoring of international sporting events the Kia brand is now more widely recognized than
ever before. We began sponsoring the Australian Open tennis tournament in 2001 - the largest single sports marketing
initiative we have ever undertaken - and saw some impressive results leading to an extension of our sponsorship until 2008.
Sponsorship of the Korean national ski-jumping team also increased our brand awareness around the world as did the
unparalleled coverage of Korea during the 2002 World Cup.
Nonetheless, 2003 presents a difficult set of challenges to the automobile industry. Major export markets such as the U.S.
and Europe are in a downturn. The current situation in the Middle East raises the specter of soaring oil prices and the
possibility of a protracted global recession. The Korean economy is also slowing and consumer sentiment is waning.
Competition within the automobile industry, always a cut-throat market, is expected to intensify still further.
Despite gloomy predictions, we at Kia Motors are confident of reaching our 2003 targets of increasing annual sales by 15.5%
to total 1.037 million finished vehicles worth 16.4 trillion.
To achieve these ambitious objectives we intend to upgrade plant operations and maintain smooth labor relations. Cost
cutting efforts will continue as well. We will also bolster the competitiveness of the Kia brand through ongoing improvements
to the quality and performance of the vehicles we produce.
We expect to significantly increase our share of the Korean premium sedan market with the new Opirus. Overseas, we will
increase the portion of value-added RVs and full-sized models in our product mix. We will also work on expanding and
strengthening our overseas sales network to build a solid base for our future plans. R&D investment will also be increased
substantially in 2003, as will production capacity for our hot-selling Sorento SUV and Carnival/Sedona minivan.
Kia’s offering of high-quality, good value cars will become a more compelling proposition going forward. Coupled with a
stronger service network and a consistent branding and corporate identity strategy, I believe that 2003 will be another strong
year for Kia Motors Corporation.
I look forward to another record performance.
Kia Motors Corporation
President & CEO, Kim, Noi-Myung