[Alpha Biz=(Chicago) Reporter Paul Lee] Kia's Chinese joint venture has not been able to get out of the "complete capital erosion."

According to Kia's quarterly report on the 17th, Jiangsu Yueda Kia, Kia's Chinese subsidiary, totaled 1.9296 trillion won and 2.666 trillion won, respectively, as of the end of the third quarter of this year. Debt is in full capital erosion, more than KRW 730 billion more than assets.

Considering that Jiangsu Yueda Kia's assets and liabilities stood at KRW 2.809 trillion and KRW 2.4768 trillion, respectively, as of the end of last year, assets decreased and debt increased further this year. The amount of capital erosion also nearly doubled as of this month from 395.9 billion won at the end of last year.

Jiangsu Yueda Kia's sales in the first to third quarters of this year were 1.6055 trillion won, up 10% from 1.4581 trillion won in the same period last year. However, it is still losing nearly 300 billion won. Net loss for the current term also amounted to 331.1 billion won. Cash and cashable assets amounted to 115.1 billion won, which was one-ninth of the financial debt amounting to 1 trillion won.

Jiangsu Yueda Kia is a joint venture run by Kia with Jiangsu Yueda Kia, a state-owned company owned by Yancheng City, China, at a ratio of 50 to 50. Originally, Dongfeng Motors, along with Kia (50%) and Yueda (25%), also held a 25% stake, but Dongfeng Motors handed over its entire stake to Wida at the end of 2021 and dropped out of the business.

The Jiangsu Yueda Kia fell into full capital erosion at the end of 2021 when Dongfeng withdrew. Since then, it has escaped capital erosion through a KRW 720 billion paid-in capital increase last year, but its capital has been completely eroded again due to sluggish sales.

Kia plans to launch a new electric vehicle next year and introduce a new electric vehicle in China every year to establish a full lineup of electric vehicles.

 

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