Kia 2009 Annual Report Download

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Table of contents

  • Page 1
    AnnuAl RepoRt 2009 _

  • Page 2
    ... Design Management 20 Branding 26 Marketing 28 Accelerating Growth Around the World 30 Domestic Business Performance 32 Overseas Business Performance 34 Securing a Place at the Top 40 Research & Development 42 Product Line-Up 48 FinAnciAl review 50 GlOBAl netwOrK 122 BOArD OF DirectOrs 124 cOrPOrAte...

  • Page 3
    FinAnCiAl hiGhliGhTS 2009 AT A GlAnCe KIA MOtORs AnnUAL RePORt 2009 04 /05 ReDefInInG MOBILIty 2009 2008 2007 2006 2005 pRoduction (thousand units) opeRAting income (KRW in billions, %) 6.2% sAles vOluMe (Units) Korea export (excluding CKD) suMMArizeD BAlAnce sheet (KRW in millions) ...

  • Page 4
    KIA MOtORs AnnUAL RePORt 2009 KIA MOtORs AnnUAL RePORt 2009 roi stands for ReDefInInG MOBILIty 06 /07 'return On innOvAtiOn' ReDefInInG MOBILIty Four years ago, Kia made the most important strategic decision of the company's history. in an industry where established global players command well...

  • Page 5
    neW MODeL 2009 KIA MOtORs AnnUAL RePORt 2009 roi stands for ReDefInInG MOBILIty 'return On innOvAtiOn' Venga Venga is a concept car designed exclusively for the european market. We began with the observation that other companies' MPVs sacrificed too much style with their singular focus on ...

  • Page 6
    ... 2009 KIA MOtORs AnnUAL RePORt 2009 r&d means ReDefInInG MOBILIty 08 /09 'reseArch AnD DistriButiOn' ReDefInInG MOBILIty Our r&D strategy is closely aligned with our business strategy. we create driverfocused cars that reflect modern values, and support them with youthful, creative marketing...

  • Page 7
    KIA MOtORs AnnUAL RePORt 2009 r&d means ReDefInInG MOBILIty 'reseArch AnD DistriButiOn' Forte the forte 4-door sedan is a car-about-town, a trendy favorite that mixes wonderfully with every crowd and occasion. Redesigned front and rear profiles have rejuvenated Cerato's outgoing personality so ...

  • Page 8
    KIA MOtORs AnnUAL RePORt 2009 KIA MOtORs AnnUAL RePORt 2009 CSr implies ReDefInInG MOBILIty 10 / 11 'creAtive sOciAl resPOnsiBility ' ReDefInInG MOBILIty individually, every one of us can make a difference. together, we can change the world. Our approach to corporate citizenship is just as ...

  • Page 9
    KIA MOtORs AnnUAL RePORt 2009 KIA MOtORs AnnUAL RePORt 2009 CSr implies ReDefInInG MOBILIty 08 / 09 'creAtive sOciAl resPOnsiBility ' cee'd hybrid cee'd Hybrid takes responsibility for managing its own CO2 emissions, thanks to its revolutionary IsG (Idle stop & Go) system. IsG automatically ...

  • Page 10
    .... Creation of customer value is what drives the success of Kia Motors. the recent uncertain economic environment has highlighted the tremendous value of Kia's technology, design and innovative approach to brand management. Moreover, when we enjoy the good fortune of rising sales, we share it with...

  • Page 11
    ...the completion of our Georgia, UsA plant in 2009 has given a significant boost to our ability to serve the world's largest car market. On the R&D side, our investments have continued to secure new growth engines. We strengthened our global R&D network connecting Korea, the U.s. and europe by opening

  • Page 12
    KIA MOtORs AnnUAL RePORt 2009 oPerATion revieW KIA MOtORs AnnUAL RePORt 2009 16 / 17 ReDefInInG MOBILIty ReDefInInG MOBILIty ProGreSSive innovATion Driving 20 Design Management 26 Branding 28 Marketing Accelerating GroWTh Around The World 32 Domestic Business Performance 34 Overseas ...

  • Page 13
    KIA MOtORs AnnUAL RePORt 2009 KIA MOtORs AnnUAL RePORt 2009 18 / 19 ReDefInInG MOBILIty ReDefInInG MOBILIty 411 Domestic sales (thousand units) 315 272 2007 2008 2009 Driving the high added value of Kia products comes from design, execution and marketing innovation, coupled with an ...

  • Page 14
    ...2005, Kia Motors designated 'design' as a core capability that would become excellence of design the centerpiece of the company's revival. One year later, we publicly announced management at our intention to compete globally and win market share based on the excellence of home and Abroad our product...

  • Page 15
    ... is that design retains its value through good times and bad. 2009 was a year in which small steps were made toward economic recovery in most countries, but it remained a very challenging year in which to do business. Our focus on the design value and brand value of Kia Motors' products has been...

  • Page 16
    ... vehicle was Soul, a car that has exceeded all our expectations and proven the value of our design work. interview with Peter Schreyer CHIef DesIGn OffICeR Q2. how have you managed to balance Kia's design priorities with the need to introduce eco-friendly products to the market? This question...

  • Page 17
    ... RePORt 2009 Branding KIA MOtORs AnnUAL RePORt 2009 ReDefInInG MOBILIty We are also constantly reading the pulse of the public, engaging professional market researchers to monitor consumers' response to our brand management efforts. Similarly, we are always looking for ways to promote the Kia...

  • Page 18
    ...for customer attention and emphasizing the unique value and design strengths of Kia automobiles. KIA MOtORs AnnUAL RePORt 2009 28 /29 ReDefInInG MOBILIty ReDefInInG MOBILIty marketing to the young-at-heart Kia Motors is a highly active marketer. We use multiple channels and marketing strategies...

  • Page 19
    ... KIA MOtORs AnnUAL RePORt 2009 30 / 31 ReDefInInG MOBILIty 29.5% 27.3% 2009 2008 22.3% ReDefInInG MOBILIty Domestic Market share (%) 2007 Accelerating GroWTh Around The World Over the past several years, Kia has proven the strength of our products, our strategy and our vision. As a company...

  • Page 20
    ... innovative new models, Kia Motors is rounding out its product line-up and continuing to raise its brand value. The company's intense focus on design and marketing is paying off by bringing new customer segments into Kia's showrooms and providing high-value customers with a full range of vehicles to...

  • Page 21
    ... everywhere - from Europe to the Middle East, from China to America. Kia's marketing message may vary from one country to another, but the core value of our products remains the same: We make brilliantly designed cars for people who love life. KIA MOtORs AnnUAL RePORt 2009 stepping up entrance...

  • Page 22
    ... more awards and accolades in 2009 than in any previous year. Kia Motors is rapidly changing the world's perception of Korean brand cars, and is poised to continue to build trust and dominate roads all around the world through outstanding design, top-notch quality and customer-oriented service.

  • Page 23
    ... Awards, Korea, June 2009 • best value-for-money model of the year Frost & Sullivan Asia Pacific Automotive Awards, Indonesia, June 2009 • most Reliable used car Which? Driver Survey 2009, UK, July 2009 Rio • greenest vehicles of 2009 ACEEE, USA, February 2009 • top 10 cars for less...

  • Page 24
    KIA MOtORs AnnUAL RePORt 2009 drivinG ProGreSSive PoWer KIA MOtORs AnnUAL RePORt 2009 40 / 41 ReDefInInG MOBILIty ReDefInInG MOBILIty 7,410 2007 11,080 2009 8,559 2008 csr expense (KRW in miilions) Kia invests in research, technology and, most importantly, people, as we strive to become an...

  • Page 25
    ... will comprise the largest share of Kia's worldwide auto sales. launching of kia's hybrid electric vehicle (hev) line-up Using technology developed by Kia's own R&D teams, Kia Motors launched the Forte LPi Hybrid vehicle in 2009. It is the first commercial production car in the world to use an LPi...

  • Page 26
    ... 2009 KIA MOtORs AnnUAL RePORt 2009 Applying the latest technologies to electric vehicle (ev) production ReDefInInG MOBILIty For many years, Kia has been investing in electric car research, particularly the development of batteries, which are the core component of an electric vehicle. Our plan...

  • Page 27
    ... concept cars and development of mass-production cars suitable for the US market. • Location : Irvine, California, US • Facilities : Design Studio 01 Europe Technical Center/ Hyundai Design Center Europe 04 Eco-Technology Research Institute 09 KIA DESIGN CENTER AMERICA â-' Boasting world-class...

  • Page 28
    ... 2009 ProduCT line-uP KIA MOtORs AnnUAL RePORt 2009 48 /49 ReDefInInG MOBILIty ReDefInInG MOBILIty COLORFUL MIND THE CAR POWERED BY PASSION CONNECTING TO THE NEW DYNAMIC WORLD EXPERIENCE THE NEW KIA THE VERSATILE VENGA The moment you take the wheel of the Kia Picanto (Morning) your eyes...

  • Page 29
    ...-money offered by our automotive products. Although our price competitiveness has been eroded somewhat by the increasing value of the Korean won, we nonetheless expect the rising sales trend to continue. We have used the past year to leverage our marketing advantages with a stronger dealer network...

  • Page 30
    ... be offset somewhat by organic sales growth in line with the nascent economic recovery that is now underway. Kia Motors' strategy for this year is to press forward with new product launches that will raise our market profile even higher, and intensify our marketing activities. these will include...

  • Page 31
    .... Kia Motors took advantage of the stimulus measures by actively promoting its small-sized passenger vehicle line-up, touting the fuel efficiency and environmental benefits of these models. We also worked to streamline our dealer network and add more highvolume dealerships to drive our market share...

  • Page 32
    ...-production of Hyundai vehicles. Kia's plant in the us state of georgia, which began construction in the last quarter of 2006, was completed in late 2009. this plant will allow Kia to respond much more quickly and flexibly to market changes in the us, and raise the company's profile in the world...

  • Page 33
    ... deterioration in global economic conditions, Kia Motors' business fundamentals strengthened due to the company's solid financial performance. Kia's short- and long-term credit ratings remained high at A1 for short-term credit as of 2009 and AA- for long-term credit. the long-term rating was revised...

  • Page 34
    ... ANNuAL rEPOrT 2009 60 / 61 rEdEfININg mOBILITy IN mILLIONS Of WON, ExCEPT ShArE dATA rEdEfININg mOBILITy Note 2009 2008 The boArd oF direCTorS And SToCkholderS kiA moTorS CorPorATion: ASSeTS Cash and cash equivalents short-term financial instruments Accounts and notes receivable - trade...

  • Page 35
    ... stAteMents OF incOMe for the years ended december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 62 /63 rEdEfININg mOBILITy IN mILLIONS Of WON, ExCEPT ShArE dATA IN mILLIONS Of WON, ExCEPT EArNINg PEr ShArE rEdEfININg mOBILITy Note liABilities Accounts and notes payable - trade Short-term...

  • Page 36
    ... for research and human resources development reserve for technological development Cash dividend - 5.00% in 2009 on par value of 5,000 per share unAPProPriATed reTAined eArninGS To be CArried over To SubSequenT yeAr ￦ ￦ 2009 2008 bAlAnCe AT JAnuAry 1, 2008 Capital stock Capital surplus...

  • Page 37
    ...2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 66 /67 rEdEfININg mOBILITy IN mILLIONS Of WON rEdEfININg mOBILITy IN mILLIONS Of WON Capital stock Capital surplus Accumulated other Capital comprehensive adjustments income(loss) retained earnings Total 2009 CASh FloWS From oPerATinG ACTiviTieS...

  • Page 38
    ... stAteMents OF cAsh FlOws for the years ended december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 68 /69 rEdEfININg mOBILITy IN mILLIONS Of WON IN mILLIONS Of WON, ExCEPT ShArE dATA rEdEfININg mOBILITy 2009 deferred tax assets deferred tax liabilities Payment of warranty costs Payment...

  • Page 39
    ... tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 70 / 71 rEdEfININg mOBILITy rEdEfININg mOBILITy 1. OrGAnizAtiOn AnD DescriPtiOn OF Business Kia motors Corporation (the "Company"), one of the leading motor vehicle manufacturers in Korea, was...

  • Page 40
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 72 /73 rEdEfININg mOBILITy rEdEfININg mOBILITy PresentAtiOn Trading securities, available-for-sale securities which mature within one year from the end of the ...

  • Page 41
    ...-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 74 /75 rEdEfININg mOBILITy rEdEfININg mOBILITy Company assumes substantially all the risks and rewards of ownership are classified as capital leases. All other leases are classified as operating leases...

  • Page 42
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 76 /77 rEdEfININg mOBILITy rEdEfININg mOBILITy between the nominal value and the present value of such receivables or payables is amortized using the effective ...

  • Page 43
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 78 /79 rEdEfININg mOBILITy rEdEfININg mOBILITy PrOvisiOn FOr wArrAnties The Company generally provides warranty to the ultimate consumer for each product sold ...

  • Page 44
    ... current portion of long-term investment securities ￦ (598) 17,680 These non-marketable securities are recorded at cost as fair value cannot be reliably estimated. (iii) Changes in unrealized holding gains Changes in unrealized gains for the years ended december 31, 2009 and 2008 are summarized...

  • Page 45
    ...cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 82 /83 rEdEfININg mOBILITy rEdEfININg mOBILITy (b) held-to-maturity securities 8. equity securities AccOunteD FOr By usinG equity MethOD (a) Investments in associated companies accounted for by using the...

  • Page 46
    ... FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 84 /85 rEdEfININg mOBILITy rEdEfININg mOBILITy (*) The Company accounts for its investment in hyundai mobis Co., Ltd. and hyundai AmCO Co., Ltd. under the equity method of accounting due to its significant management...

  • Page 47
    ... stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 86 /87 rEdEfININg mOBILITy rEdEfININg mOBILITy (d) Changes in investor-level (negative) goodwill as of december 31, 2008 are as follows: (f ) Changes in balance of investments in associated companies accounted for by using...

  • Page 48
    ... consists of dividends from associated companies except for Kia motors America Inc, Kia motors Europe gmbh and Kia motors Australia Pty Ltd. (as noted in *4 above). (*6) The Company accounted for its investment by using equity method of accounting based on the unaudited financial statements as it...

  • Page 49
    ... mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 90 / 91 rEdEfININg mOBILITy rEdEfININg mOBILITy The Company accounted for its all investment by using equity method of accounting based on the unaudited financial...

  • Page 50
    ... motors Europe gmbh. Parent hyundai motor Company Controlled subsidiary (*1) Kia motors America, Inc. (KmA) Kia motors manufacturing georgia, Inc(Kmmg)(*4) Kia Canada Inc. (KCI) Kia motors deutschland gmbh (Kmd) Kia motors Polska Sp.z.o.o. (KmP)(*3) Kia motors Slovakia s.r.o. (KmS) Kia motors Sales...

  • Page 51
    ... ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 94 /95 rEdEfININg mOBILITy rEdEfININg mOBILITy (b) Significant transactions which occurred in the normal course of business with related companies for the year ended...

  • Page 52
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 96 /97 rEdEfININg mOBILITy rEdEfININg mOBILITy (d) Account balances with related companies as of december 31, 2009 are as follows: (e) Account balances with ...

  • Page 53
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 98 /99 rEdEfININg mOBILITy rEdEfININg mOBILITy (f ) Executive compensation for each of the following categories for the years ended december 31, 2009 and 2008 ...

  • Page 54
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 100 /101 rEdEfININg mOBILITy rEdEfININg mOBILITy (c) Changes in property, plant and equipment for the year ended december 31, 2008 are summarized as follows: ...

  • Page 55
    ... company entered into a technical support contract with Kia motors Slovakia s.r.o. for which it received lump sum payment of ￦ 67,377 million in december 2006. revenue will be recognized over the seven year contract period ending 2012 ￦ 317,126 15. shOrt-terM BOrrOwinGs Short-term borrowings...

  • Page 56
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 104 /105 rEdEfININg mOBILITy rEdEfININg mOBILITy 16. lOnG-terM DeBt (a) Long-term debt as of december 31, 2009 and 2008 are summarized as follows: (b) details ...

  • Page 57
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 106 /107 rEdEfININg mOBILITy rEdEfININg mOBILITy 17. Other nOn-current liABilities Other non-current liabilities as of december 31, 2009 and 2008 are as follows...

  • Page 58
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 108 /109 rEdEfININg mOBILITy rEdEfININg mOBILITy 20. PrOvisiOn FOr wArrAnties Changes in provision for warranties for the years ended december 31, 2009 and 2008...

  • Page 59
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 110 / 111 rEdEfININg mOBILITy rEdEfININg mOBILITy (c) The company deferred the net income (loss) on valuation of the effective portion of derivative instruments...

  • Page 60
    ...FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 112 / 113 rEdEfININg mOBILITy rEdEfININg mOBILITy (a) Legal reserve The Korean Commercial Code requires the Company to appropriate as legal reserve an amount equal to at least 10% of cash dividends for each accounting...

  • Page 61
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 114 / 115 rEdEfININg mOBILITy rEdEfININg mOBILITy (b) The components of income tax expense for the years ended december 31, 2009 and 2008 are summarized as ...

  • Page 62
    KIA mOTOrS ANNuAL rEPOrT 2009 nOtes tO nOn-cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 116 / 117 rEdEfININg mOBILITy rEdEfININg mOBILITy 30. eArninGs Per shAre Earnings per share of common stock for the years ended december 31, 2009 and 2008 are ...

  • Page 63
    ...cOnsOliDAteD FinAnciAl stAteMents december 31, 2009 and 2008 KIA mOTOrS ANNuAL rEPOrT 2009 118 / 119 rEdEfININg mOBILITy rEdEfININg mOBILITy 33. nOn-cAsh investinG AnD FinAncinG Activities Significant non-cash investing and financing activities for the years ended december 31, 2009 and 2008 are...

  • Page 64
    ... rEdEfININg mOBILITy tO the PresiDent OF KiA MOtOrs cOrPOrAtiOn: We have reviewed the accompanying report on the Operations of Internal Accounting Control System ("IACS") of Kia motors Corporation (the "Company") as of december 31, 2009. The Company's management is responsible for designing and...

  • Page 65
    ... GlobAl neTWork KIA mOTOrS ANNuAL rEPOrT 2009 122 /123 oveRseAs plAnts rEdEfININg mOBILITy kia motors slovakia (Europe) dongfeng yueda kia motors corp. (China) kia motors manufacturing georgia (North America) rEdEfININg mOBILITy R&d centeR europe technical center/ kia design center (Europe...

  • Page 66
    ... mOTOrS ANNuAL rEPOrT 2009 boArd oF direCTorS (from march 19th, 2010) 124 / rEdEfININg mOBILITy 1. Sung-Eun Chung • Currently, CEO & Vice Chairman, Kia Motors Corp. • Vice Chairman, Kia Motors Corp. 2. Young-Jong Seo • Currently, CEO & President, Kia Motors Corp. • President, Kia Motors...

  • Page 67
    ..., CEO & Vice Chairman, Kia Motors Corp. • Vice Chairman, Kia Motors Corp. 2008 1 Mohave (Borrego) premium SUV introduced 6 Completion of Kia Design Center America 8 Forte (all-new Cerato) compact sedan introduced 9 Soul introduced 11 Design Management Award received from Korean Design Awards 2009...

  • Page 68
    231, Yangjae - Dong, Seocho - Gu, Seoul, 137- 938, Korea TEL : 82-2- 3464 -1114