Kia Motors ranks 7th in China's auto market

HONG KONG (Yonhap) -- Kia Motors Corp., Korea's second-largest automaker, ranked 7th in China's auto market with a market share of 3.1 percent, company officials said Tuesday.

Kia Motors said it sold 289,817 vehicles in China during the January-August period, up 12.7 percent from 257,158 in the same period last year.

Kia's larger affiliate, Hyundai Motor Co., was the No. 5 player in the Chinese car market by selling 511,960 vehicles with a share of 5.5 percent.

Market analysts expect Kia Motors to continue to boost its presence in China. "Despite concerns about further slowdown in the Chinese auto industry, a visit to Kia's China operations renewed our confidence in its ability to gain market share," said James Yoon, an analyst at BNP Paribas.

Yoon added that Kia has a shorter inventory cycle of 1.6 to 1.8 months, compared to the Chinese auto industry average of more than two months.

"Kia maintained its China net profit margin at 8.1 percent in the first half of this year despite its price cuts, which were flat from last year's," he said.

Kia Motors plans to expand its production capacity in China to 800,000 units by 2015 from the current 440,000.

The car maker also expects to have a sales network of 560 dealers by end of 2012, the company officials said.