Kia’s headquarters in Gangnam, Seoul (Kia)

Hyundai Motor Group’s smaller affiliate Kia said Friday that it has posted 2.9 trillion won ($2.1 billion) in operating profit, marking the highest ever for a third quarter, despite mounting challenges in the automotive industry.

The carmaker’s profit increased 0.6 percent from the same period last year, while its sales revenue surged 3.8 percent to 26.5 trillion won.

The sales volume decreased 1.9 percent to 763,639 units, due to a temporary production hiatus from its two car manufacturing plants in Gyeonggi Province and car lineup adjustments across advanced markets amid declining global demand.

However, the company said it increased profit through its core competitive advantages -- product appeal and brand power -- leading to an improved sales mix of value-added vehicles, including sport utility vehicles, price increases in the lucrative North American market and reduced material costs.

By region, sales volume in North America and India climbed 2.5 percent and 12.3 percent, respectively, driven by popular SUV models like the Sportage and Telluride. In contrast, European sales dipped 13.4 percent due to cuts in electric vehicle subsidies and a sluggish Chinese market resulted in a 10 percent decrease.

In the third quarter, Kia’s eco-friendly vehicle sales rose on-year by 3.6 percent to 155,000 units, with strong demand in hybrid engine cars and new models, including the Carnival HEV and Sportage HEV, despite slowing demand for EVs.

For the fourth quarter, Kia plans to boost sales of hybrid models in Korea and the US with the Carnival HEV and Sorento HEV. In Europe, Kia aims to sell more than 9,000 units of the EV3, a compact electrified SUV, and increase the eco-friendly vehicle ratio to over 40 percent.

“We are aware of the market’s concerns over Kia’s weak sales of EV volume zone models,” said Joo Woo-jeong, the chief financial official at Kia, during a conference call held in the afternoon. “But starting this year, the company launched the EV3 and EV4, with the EV4 and EV5 set to debut next year. We are committed to ensuring the successful launch of these vehicles, which we anticipate will bring tangible outcomes.”

Having exceeded its sales target for the third quarter, Choi Hee-suk, head of the investor relations team at Kia, said the company has raised its annual guidance for this year. Kia aims for a 3.9–8.8 percent increase in sales revenue, reaching 105 trillion to 110 trillion won, and a 7.5–10 percent rise in operating profit, targeting 12.8 trillion to 13.2 trillion won. The operating profit margin has been adjusted from the previous 11.9 percent to over 12 percent.