Kia Motors Sustainability Magazine 2018 The Future Has Begun The Future Has Begun Kia Motors Sustainability Magazine 2018 Cover Story MOVE is the name of Kia Motors’ In January 2018, the first humanoid artificial intelligence robot, Sophia, which looks like a female human, was a big sensa- annual sustainability report and is a reference tion in Korea. The first flying car—only seen before in sci-fi movies—is likely to hit the skies as early as April 2018. The fourth to the company’s ongoing progress toward embracing change through continuous industrial revolution, characterized by hyperconnectivity and superintelligence, has become a buzzword in Korea, and this automobile innovation. wind of change is sweeping through the automobile industry as well. Cars are no longer just a means of transport, as arti- ficial intelligence-mounted and connected vehicles will bring about a sea change in terms of not only our daily mobility but also our everyday lifestyles. Hybrid and plug-in hybrid cars, as well as electric cars, are not just concept cars anymore. You can easily see them on the roads wherever you go. The auto industry is evolving rapidly while technology development is underway by several carmakers to achieve their zero emissions goals. When combined with autonomous driving and con- nectivity technologies, mobility will be safer and more convenient, ensuring a higher level of freedom and more leisure of time for everyone. From a broader perspective, social issues like road accidents and traffic jams will be solved, while con- tributing to mitigating climate change and environmental pollution. As the author William Gibson put it, “The future is already here—it's just not very evenly distributed.” Kia Motors wants to play a role in this distribution. With the aim of contributing to a sustainable life for all without limits in the distribution of ben- efits, Kia Motors is concentrating its resources into developing the highest level of future mobility technology. This report details how we are preparing to surprise you once more, and we hope you enjoy the read. Kia Motors opened BEAT 360, a multipurpose brand experience center, in Gangnam, Seoul in 2017. Based on the structural motif of air flowing against a moving car body, more than 7,000 exterior mod- ules on the building’s facade visualize Kia’s dynamic and innovative brand philosophy in different ways depending on the viewing angle and time of day. The same modules repeat the pattern on the interior of the building, naturally connecting the three unique theme spaces that offer visitors a 360-degree brand experience, suiting their tastes for art and leisure while providing a unique look into the present and future The Future Has Begun of Kia Motors. See pages 34 and 35 for more information. In January 2018, the first humanoid artificial intelligence robot, Sophia, which looks like a female human, was a big sensa- tion in Korea. The first flying car—only seen before in sci-fi movies—is likely to hit the skies as early as April 2018. The fourth industrial revolution, characterized by hyperconnectivity and superintelligence, has become a buzzword in Korea, and this wind of change is sweeping through the automobile industry as well. Cars are no longer just a means of transport, as arti- ficial intelligence-mounted and connected vehicles will bring about a sea change in terms of not only our daily mobility but also our everyday lifestyles. Hybrid and plug-in hybrid cars, as well as electric cars, are not just concept cars anymore. You can easily see them on the roads wherever you go. The auto industry is evolving rapidly while technology development is underway by several carmakers to achieve their zero emissions goals. When combined with autonomous driving and con- nectivity technologies, mobility will be safer and more convenient, ensuring a higher level of freedom and more leisure of time for everyone. From a broader perspective, social issues like road accidents and traffic jams will be solved, while con- tributing to mitigating climate change and environmental pollution. As the author William Gibson put it, “The future is already here—it's just not very evenly distributed.” Kia Motors wants to play a role in this distribution. With the aim of contributing to a sustainable life for all without limits in the distribution of ben- efits, Kia Motors is concentrating its resources into developing the highest level of future mobility technology. This report details how we are preparing to surprise you once more, and we hope you enjoy the read. CONTENTS Kia Motors Sustainability Magazine 2018 Issue Book 12 Product: Future Mobility 30 Customer: Product Quality 38 Employees 04 Kia around the World Boundless for All To the Heart of Taking Care of Our Own 06 CEO’s Message Since its invention at the beginning of the past People constitute a company. Therefore, recruiting and 08 Business Results century, the automobile has gone through a major Automobiles fostering high-caliber talent plays an important part in 12 Product: Future Mobility transformation. Its power source is different from that of Regardless of what mobility will look like in the future, not only running a business but also building a strong 26 Product: Fuel Efficiency its ancestors a century ago. It is learning how to drive quality must remain an uncompromised part of the society. Well aware of this truth, Kia Motors assists our 30 Customer: Product Quality by itself. And it is equipped with artificial intelligence. automotive business. With the aim providing a different employees in leading a well-balanced life at work and 34 Customer: Customer Service Kia Motors is speeding up its innovation in order to beat to our customers, Kia Motors continues to enhance home. the safety and convenience of the everyday driving 38 Employees fairly distribute the benefits of this ongoing revolution to everyone. experience. 42 Partner Companies 44 Social Contribution 49 2017 Overview Fact Book 56 Sustainability Management Key Performance Index 57 Sustainability Management 58 Corporate Governance 60 Stakeholder Engagement 62 Corporate Social Responsibility 64 Economy 66 Environment Product: Fuel Efficiency Customer: Customer Service Social Contribution 80 Society: Employees/Customers/Partner 26 34 44 Companies/Community 90 KMS New Standards of Marching to Extending 94 Independent Assurance Statement 96 GRI Index Efficiency Our Own Beat a Helping Hand 100 About MOVE Kia’s new models have started beating to a new heart Customer service plays a pivotal role in determining The world has reached a unanimous conclusion to 101 Contact Information in 2018. Our next-generation SmartStream powertrain the preference of any brand. Committed to offering take concerted actions to deal with imminent global has been applied to the all-new Cerato/Forte (K3) impressive services that go beyond customer issues in the form of the United Nation’s Sustainable compact since February 2018, while we are raising the expectations, Kia Motors opened the BEAT 360 brand Development Goals (SDGs), which Kia Motors explicitly efficiency of all aspects of our models, with a focus on experience center in 2017. advocates. With the aim of phasing in SDGs to our entire Reader’s guide aerodynamic design and development of lightweight car business management activities, we began with the Additional information concerning the terms and facts presented in this bodies. social contribution sector, and our overall plan as well as report is separately provided in the report or website and marked with results for 2017 can be found in this report. the icons shown below. The PDF file of this report, with links to relevant websites that contain more details, is available on Kia Motors’ official website. Click the title in the Table of Contents to go to that particular sec- tion or click the footnote to go to the relevant PDF page or website link. Go to the page in this report for more details. Go to the website for more details. Glossary or additional information available 2 Kia Motors Sustainability Magazine 2018 3 PROFILE Kia Motors was the world’s 10th largest automobile brand as of 2017. Today, Kia Motors is undertaking change and in- PROFILE Kia around the World novation to establish itself as a forward-thinking automobile brand that can bring the infinite possibilities of future mobil- ity into the daily lives of every customer around the world. Our global network of production, research & development, sales and service covers all major global markets. More than 50,000 employees are working at these premises under one shared vision. We are clearly aware that responsible growth is the essence of any business, and we will make consistent efforts toward balanced and sustainable development by sharing the fruits of growth with all our stakeholders. Initial quality ranking 16 14 Among all brands according to J.D. Power 2 and Associates’ 2017 U.S. Initial Quality Study (IQS) 29 24 28 4 15 34 12 11 27 st 31 Sales volume 20 1 13 8 23 Shipped in 2017 6 3 10 25 9 7 30 33 1 5 Market position vehicles 19 2,724,226 Annual sales volume 26 th globally No. of employees Brand ranking 10 32 Globally 21 Interbrand Best Global Brands 2017 51,789 persons 22 69 th Sales revenue Based on K-IFRS CO2 emissions 53.5 trillion KRW Niro PHEV 26 g/km Business Domains Global Network 17 Passenger Cars Picanto (Morning), Ray, cee’d, Rio (Pride), K2 (Pegas), Cerato/Forte Sales & Service Regional Headquarters R&D 18 (K3), Forte/Cerato (K3) Koup, K4, Optima (K5), Cadenza (K7), Quoris/ Korea Sales: 22 regional