Kia Motors Corporation reported a smaller than expected profit as the second-worst strike in the past decade affected vehicle production.
South Korea’s second largest carmaker reported a third-quarter net income of 829.5 billion won ($756 million), an increase of 28 percent compared with last year’s 647.9 billion won. However, the Seoul-based company failed to reach analysts’ estimated average of 974.6 billion won.
Kia Motors’ stock fell the most in five months in Seoul trading as the carmaker cut next year’s production target following its nine-week dispute with its union. Labor protests cost Kia an estimated 1.03 trillion won in lost production. It was Kia’s worst strike in terms of volume lost, as the strikes prevented the company from making 62,890 vehicles.
Kia lowered its production target for 2013 to 2.8 million units, compared with an earlier goal of 3 million. Output is expected to reach 3 million again only after Kia’s new plant in China starts production in 2014.
Another problem for Kia is the strengthening won, which is hurting the company’s exports. “The strengthening won may hurt the company’s profitability moving forward,” Kia’s chief financial officer Park Han Woo was quoted as saying by Bloomberg.