Kia: A Disppearing Brand

The financial data for Kia Motor Company, Profits P versus units N sold and Profits P versus Revenues R, are both shown to follow the predictions of the classical breakeven analysis. It is also shown that although the fixed costs have increased, the variable costs seem to have remained constant even as revenues have increased and the number units sold N has increased. It is also shown that a measure of the constancy of the variable costs is the slope of the P-N graph and the slope of the P-R graph. Finally, it is shown that the R-N graph, revenues R versus number of units sold N, has a finite positive intercept. Revenues go to zero when the units sold falls below a critical value N = N0. If we add up all the discounts that are offered to get customers to buy the product, it is almost as if the company has to give away a minimum of N0 units for free! This minimum number N0 therefore does not contribute to positive revenues generation. Thus, the intercept N0 has taken as a measure of the competitive pressures faced by the company to sell its products. It appears that more educated strategies to become more competitive can thus be evolved by careful study of these three plots considered here.