♠ Posted by Emmanuel in
Currencies,
Religion,
South Korea
at 8/22/2014 01:30:00 AM
You'd think that being "vicar of Christ" would be a heavy enough burden. To the list of many accolades accorded to the current leader of the Catholic church, however, add this one: "savior of Korean manufacturing." You see, Pope Francis recently visited South Korea after receiving an invitation to go there. Unlike the nominally godless North Korea, over a tenth of South Korea's population is composed of Catholics. It is just as well since Korea has been in need of divine intervention as of late given the economic headwind of a
fast-appreciating currency. One of those
negatively affected was Kia Motors, the country's second-largest automaker:
Major companies announced financial results for the second quarter
yesterday, most of which declined due to the strengthening of the Korean
won in the first half. Following Hyundai Motor’s slack quarterly
earnings report Thursday, Kia Motors announced a decline in operating
profit that it blamed on the won.
Kia Motors said its second quarter profit fell 31.7 percent from a year earlier to 769.7 billion won. Its
operating profit for the first half of 2014 was 1.5 trillion won, down
17.8 percent from the same period last year. Its revenue was 23.98
trillion won, a 0.9 percent fall from last year. “As 75 percent
of our business comes from exports, a currency rate that fell 58 won on
average in the first half caused a deterioration in profitability,” said
the automaker in a release.
Given such a scenario, Pope Francis requesting a modest compact car as his wheels of choice in South Korea was, ah, godsend for Kia. Practicing what he preaches, one of the world's most influential and powerful persons chooses to go around not in ostentatious bulletproof luxury cars but hatchbacks. Asking for a modest vehicle to carry him around, he
chose the Kia Soul which is soulled [sic] around the world. Talk about free publicity:
The pope slipped into the back of the [Kia Soul] and
rolled down a window to wave at the welcoming party...[t]he pontiff’s choice is a victory for Kia at a time when
the won, last quarter’s fastest-appreciating major currency, is
eroding South Korean exporters’ earnings. The selection also
underscores the pope’s preference for small cars, a departure
from past “Popemobiles,” such as the custom-built, bulletproof
Mercedes-Benz Pope John Paul II used to ride on.
“This will help Kia by bringing far-reaching exposure
through the mass media,” Kim Jin Kook, chief executive officer
of auto researcher Marketing Insight, said by phone. “That
exposure will be related to the pope, who has a very positive
image among the general public, which in return will trigger a
halo effect for Kia.”
No power windows in 2014? Pope Francis is clearly downsizing. At any rate, the
upshot of the recent papal visit to South Korea has been increased sales of the Kia Soul. Mind you, it's a good model anyway that provides exceptional space for a compact vehicle:
The so-called "Pope Francis" effect may have extended to the "popemobile" as well. Sales of Kia Motors' Soul model shot up last week, after Pope Francis
used the compact car to get around during his trip to Korea.
The company says an average of 32 cars were sold per day in the country
right before the pope arrived until shortly after he left. That's up 63 percent compared to the same period last month. Kia forecasts global sales of the Soul model to spike as well in the months to come.
Catholicism in Korea is an interesting growth story that I will discuss another day. Lest you doubt its growing influence, I leave you with the 800,000-strong
mass that Pope Francis held in downtown Seoul. Whatever views you may have of Catholicism, he is a huge draw in South Korea--a decidedly non-traditional market for the church in saving souls.
