Kia Motors Corp. reported Friday an operating loss for the third quarter ended September as it booked more than 1 trillion won ($886 million) in loss reserve as it had previously warned investors upon losing the first trial in a lawsuit lodged by its union demanding overdue wages by counting in bonuses and other incentives as base salary.

Kia Motors said in a regulatory filing that it recorded 427 billion won ($378 million) in operating loss during the July to September period, the first quarterly loss in 10 years. Its sales rose 11.1 percent from the previous year to 14.1 trillion won. It also incurred a net loss of 291.8 billion won.

As of 2:23 p.m. on Friday, shares of Kia Motors rose 0.29 percent to 34,350 won as investors shrugged off the one-time loss.

In August, a Seoul court partially sided with the union in the first trial ruling by ordering Kia Motors management to pay 422.3 billion won, 38.7 percent of what the workers had demanded by identifying regular bonuses and meal allowances as base salary.

The South Korea’s second biggest carmaker sold 692,800 units of its vehicle in the third quarter, up 0.8 percent on year. Domestic shipments rose 17.9 percent from the previous year driven by brisk local demand and exports, but shipments from overseas factories slipped 15 percent due to the weak performance in China and the U.S.

During the January to September period this year, its operating profit plunged 81.4 percent to 359.8 billion won against a year-ago period while sales gained 1.8 percent to 40.5 trillion won. Net profit plummeted 64.5 percent to 863.2 billion won.

Car sales from the beginning of the year to September decreased 6.6 percent to 2.06 million units due largely to the 40.9 percent plunge in shipments to China amid rising tensions over Seoul’s deployment of U.S. missile battery. The carmaker also saw its sales fall 6.9 percent in the U.S. market despite warm response to its newly-launched compact hybrid SUV Niro. Sales in the European market rose 8.1 percent thanks to the release of new models such as K5 Wagon and Niro. Sales in Latin America and Russia also grew 14.1 percent and 25.4 percent, respectively.

Han Cheon-su, chief financial officer of Kia Motors in a conference call, was more upbeat about the Chinese market.

“Sentiment towards Korean brands and Korea has been slowly improving. Sales have been picking up since September,” he said.

In line with Beijing’s promotion of environmentally friendly vehicles, Kia will release a plug-in hybrid model and electric model in China next year. Two more will arrive in 2019, he said.

Under a new policy, makers of finished cars in China must up eco-friendly versions to 10 percent against total sales by 2019 and 12 percent by 2020.

“We will increase green car models in the global market from current six to 14 by 2020. We are planning an electric version of our SUV models such as Sorento and Sportage, and release of upgraded Niro that can run up to 380 kilometers (236 miles) on a single power charge,” he added.

By Lee Seung-hoon and Choi Mira

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]