Kia 2004 Annual Report Download - page 9

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Annual sales exceeded one million units for the first time,
thanks in large part to your support. This performance has
marked a turning point for the company.
To Our Shareholders:
We experienced difficulties in 2004 from high oil prices, surging prices for other raw and secondary
materials, and a protracted domestic economic slowdown. Moreover, the Korean Won appreciated
sharply against the Dollar in the second half.
Despite the adverse conditions, annual sales exceeded one million units for the first tim e, thanks in
large part to your support. This perform ance has marked a turning point for the company.
Various negative factors lowered net income 10.2% year on year to W690.6 billion, but total sale
volume was up 17.8% to 1,011,429 units. Sales revenue in 2004 was also 18.8% higher year on year to
more than W15.25 trillion. These numbers represent record quantitative growth for Kia Motors.
Importantly, we made up for slumping domestic sales by exporting 760,786 units in 2004, which is up
41.2% against the previous year. Kia achieved higher sales growth in Europe than any other automaker
for two years in a row, and record sales were also achieved in the US and China.
The strong performance can be attributed to our introduction of competitive new models such as the
European-style Morning(sub-compact car), Cerato(compact sedan), Bongo Ⅲ(small truck/commercial
van) and Sportage(com pact SUV). Of course, the steadily improving quality of Kia-built vehicles has
helped to boost overseas sales as well. Kia has im proved the fastest on the J.D. Power & Associates
initial quality survey(IQS) over the past two years.
Moreover, we have diversified our export markets, which originally focused mainly on the US, and are
selling more units in Europe, Latin America, Asia and Australia each year. This is the main reason that
our exports continue to grow even as the Dollar weakens against the Won.
This steady growth in overseas sales enabled Kia Motors to earn the Korean government's US$7 Billion
Export Tower Trophy in 2004. Also, our international credit rating was upgraded to a record "Baa3"
("investment grade") for the first tim e in Kia's history.
We can point to other very significant developments in 2004. Our global network began expanding
rapidly with the groundbreaking for our first plant in Europe and our second plant in China.
Meanwhile, our plant in Gwangju, Korea was retooled to produce 350,000 units a year, which w ill
improve profitability there. Domestic sales of the New Sportage have soared to lead all models in its
class. Finally, 2004, was the third straight year that our operations have not been marred by labor
problems. All these performances are thanks to your continuous support.
09
KIA Motors_2004 Annual Report