[THE INVESTOR] Kia Motors said on April 27 that its first-quarter earnings suffered due to some 160 billion won (US$141.68 million) recall costs to fix problematic engines.

The nation’s second largest carmaker said its operating profit plummeted 39.6 percent to 382.8 billion won on-year in a regulatory filing. Its net profit dropped 19 percent to 765.4 billion won during the cited period, while sales gained 1.5 percent to 12.84 trillion won. 

Kia’s bigger sibling Hyundai Motor also incurred some 200 billion won in recall costs, which were reflected in its first quarter earnings.

Earlier this month, Hyundia Motor and Kia Motors announced a recall of around 1.48 million vehicles that are fitted with problematic Theta 2 engines, in the US, Canada and Korea. The recall affects some of the automaker’s popular models, including Hyundai Sonata and Santa Fe, as well as Kia’s K5, K7 and Sportage, that are installed with a Theta 2-liter turbo and 2.4-liter gasoline engine made between July 2009 and August 2013.

Despite sales decline, Kia expects to recover its performance in the remainder of the year by focusing on emerging markets, including Russia, the Middle East and Africa. It also plans to sell new cars in the market, including the sport sedan Stinger next month and a compact SUV in the second half of the year.

By Ahn Sung-mi (sahn@heraldcorp.com)