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2003 Annual Report 07
To Our Shareholders :
Our company has certainly been faced with numerous challenges during 2003. Yet, I am happy to
announce that in spite of these difficulties, we have managed not only to further strengthen our
operation, but also to make another big stride forward. Although we experienced a 4% year-on-
year drop to 858,697 units sold, our sales revenue increased by 5.6% to just under KRW12.84
trillion. Net profits for the period rose by 10% to KRW705.4 billion; our best performance ever.
Our aggressive marketing effort in the US, Europe and China pushed exports to 539,902 units, up
an impressive 19.8% year on year. Our newly established European subsidiaries, having introduced
the Sorento, Carens and Carnival diesel lines, provided Kia with the fastest sales growth of
automotive makers in the European market. Meanwhile, the TianLiMa has been a huge success in
China, driving up Kia sales there impressively. Kia Motors’ aggregate exports of finished models
surpassed the 4 million mark in 2003, and the company received the US$5 Billion Export Tower
Award from the Korean government for the year.
The past year has also given rise to major enhancements in our product quality. Our product
rankings have risen steadily on the North American IQS index, which surveys American consumers.
Additionally, the repeat buyer rate published by JD Power and Associates ranked Kia Motors 12th;
again demonstrating that our sustained efforts to improve product quality are now paying off.
Kia’s prospects for membership among the elite club of world-class automotive manufactures are
bright, indeed.
Finally, new models like Opirus and Cerato have boosted our competitiveness in the passenger
vehicle market, while we improved our financial health by lowering our debt-to-equity ratio to
109.8% by the end of 2003. We completed the capacity expansion of our Gwangju plant to
350,000 units a year and relocated our research center, maximizing the synergy of our new
product development competencies. We have also established a mid-/long-term brand strategy
for enhancing our brand value significantly.
Certainly, none of these achievements could have been realized without the support of you, our
shareholders. All of us at Kia will continue to honor the trust you have invested in us by working
hard to maintain this robust growth and advancement.
With that in mind, it is important to mention that this coming year will be trying for us. Raw
material prices are expected continue to rise steadily, while the Won is appreciating sharply against
the Dollar. Moreover, prospects for Korean economic recovery in the current domestic market are
bleak.
Even so, Kia Motors has set ambitious operation goals for this year, aiming at a 27.4% year-on-
year growth, raising finished unit sales to just under 1.1 million vehicles. We aim to earn KRW1.2
trillion in ordinary income on total sales exceeding just over KRW15.8 trillion.
Sales (Korean won in billions)
11,129.2 12,158.1 12,839.9
01 02 03
Units Sold (Units)
899,788 894,268 858,697
01 02 03