KIA MOTORS SUSTAINABILITY REPORT 2008 THINKING ABOUT TOMORROW KIA MOTORS SUSTAINABILITY REPORT 2008 INSIGHT EXECUTION 231, Yangjae-dong Seocho-gu, Seoul, 137-938, Korea Kia Motors _ Sustainability Management Team TEL: +82.2.3464.5166 E-Mail: [email protected] / [email protected]www.kia.co.kr www.kiamotors.com
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Kia
Motors s
usta
inabil
ity r
eport 2
008
thin
Kin
g a
bout t
oM
orrow
Kia Motors sustainability report 2008insight execution
231, Yang
jae-do
ng
Seoch
o-g
u, Seo
ul, 137-938, K
orea
Kia M
oto
rs _ Sustain
ability M
anag
emen
t Team
TEL: +82.2.3464.5166 E-M
ail: ecoK
IA@
kia.co.kr / p
rince@
kia.co.kr
ww
w.kia.co
.kr
ww
w.kiam
oto
rs.com
Kia Motors
sustainability
report
2008
002 I Sustainability Report Framework
004 I Message from the CEO
006 I Stakeholder Participation
007 I Materiality Analysis
012 I Corporate Overview
012 I Global Network
014 I Management Philosophy and Vision
016 I Sustainability Management
020 I Corporate Governance and Board
intro
econoMic value024 I Disclosure on Management Approach
025 I Operating Performance
032 I Financial Highlights
033 I Special Story: Design Management, Global Management
environMental value038 I Disclosure on Management Approach
039 I Environmental Management
040 I Eco-Friendly Product Development
054 I Eco-Friendly Workplace
063 I Environmental Management System
065 I Eco-Friendly Supply Chain Management
069 I Environmental Management Costs
070 I Eco-Friendly Achievements in Domestic Workplace
074 I Special Story: Countering Climate Change
social value078 I Disclosure on Management Approach
079 I Employees
092 I Business Partners
097 I Customers
104 I Community
111 I Special Story: Communicating with Stakeholders
outro112 I Third Party Verification
114 I GRI (G3) / BEST Index
117 I Sustainability Report Committee
thinKing about Since 2003, Kia Motors has published its Sustainability Report for stakeholders annually. With this report, Kia aims to
demonstrate its on-going effort to better its sustainable management practices and report performance in sustainable
development initiatives to stakeholders. Kia Motors strives to fulfill its responsibilities to stakeholders who demand a
company that builds safer and more reliable vehicles while being mindful of the environment and minimizing the impact
of its automobiles. Sustainability Report 2008 provides a thorough analysis of the magnitude of the sustainability
development impact encompassing the areas of economics, the environment and society. With stakeholders’
participation, the sustainability report focuses on the subjects that address their particular interests.
This report outlines major achievements in sustainable development in 2007 with an aim to deliver a clear and accurate
picture of one year’s progress towards being a more sustainable company. Incorporating environmental consciousness
into all facets of product development, from production to logistics to supply chain management, Kia Motors continues
to grow as a socially conscious organization as detailed in this report.
RepoRting guidelines
Kia Motors Sustainability Report 2008 is based on the GRI’s* Sustainability Reporting Guidelines
2006 (G3) and BEST Sustainability Reporting Guidelines** from IPS. GRI’s criteria for the contents can
be found in the Outro of Kia Motors Sustainability Report under section “GRI (G3) / BEST Index.”
* GRI: Global Reporting Initiative (www.globalreporting.org)
** The BEST Guideline (BEST Sustainability Reporting Guideline) was jointly developed by the
Ministry of Knowledge Economy(MKE), the Korea Chamber of Commerce and Industry (KCCI),
and the Institute for Industrial Policy Studies (IPS) and provides for five levels of reporting
rigor (Level 1 ~ 5).
RepoRt outline
PuRPOSE _ This report aims to inform stakeholders of the results of sustainability management
from a balanced perspective while providing a thorough internal review of sustainability
management activities over the year. This report also serves to reexamine Kia’s current position and
evaluate future directions.
ACCOuNTING STANDARDS _ Investment and expenditure of environmental and social costs are
approved by the Board of Directors, audit committee and external audit committee according to
financial accounting standards. The report reflects an investment rating system 2004 based on the
investment breakdown by investment type.
CHANGES _ There are no significant changes in standards for reported data from previous reports,
unless otherwise specified.
DOCuMENT VERIFICATION _ This published report is based on the information provided by the
Sustainability Report Committee of Kia Motors and is created to impartially monitor the progress of
sustainable management within the company. This report is also verified by IPS in its report review,
onsite inspection and review of the Materiality Test according to the verification criterion outlined
by the GRI (G3) guideline and BEST guideline.
toMorrowKia Motors is an entity continually evolving to better serve sustainable efforts. During the evolution of this report, there
are bound to be some growing pains such as the lack of thorough overseas business information in last year’s report.
Thus, extensive information has been added about our overseas business to better meet G3 guidelines. To grow
properly, Kia will create certain rules to which it will strictly adhere. At Kia Motors, full disclosure of sustainable
development in a transparent manner is a top priority.
By publishing the Sustainability Report, Kia Motors reflects on its current sustainability management status, looks back
to find ways in which to improve and looks forward to identify innovative solutions to better serve sustainable efforts as
a responsible corporate citizen.
scope of the RepoRt
THE REPORTING PERIOD AND SCOPE _ The report covers the period between 2005 and 2007. To
accurately depict the quantitative performance, the past three years of data were collected
(environmental data in year zero (2003) + every three years). Qualitative results from the 2007
achievements in this report have also been assessed. The reporting year coincides with the
company’s fiscal year that ends on December 31st of each year. This report’s monetary denomination
is based on Korean currency, the Korean won. All quantitative data is based on ton (t), kilogram (kg),
kilometer (km), square meter (m2), kilowatt (kW), and all other units are listed with their numerical
values.
REPORT TARGETS _ This report covers Kia Motors, subsidiaries of Kia Motors and joint overseas
corporations. Domestic facilities covered include Kia headquarters, Sohari, Hwaseong and Gwangju
plants, R&D Headquarters and Customer Service Centers. Additionally, overseas facilities covered
include Dongfeng Yueda Kia Motors, Kia Motors Slovakia plant, overseas technology research
centers and other overseas subsidiaries.
The 2008 report improved upon last year’s report by improving data collection methods and
filling in data gaps of overseas business activity.
REPORT PuBlICATION SCHEDulE _ The English version of the Sustainability Report 2008 was
published on June 5th of 2008, and The Korean version was published on March 21st of 2008 and
distributed at the general shareholders meeting. The Sustainability Report is published yearly, and
this is its 6th edition.
foR moRe infoRmation
Additional information can be found through the Internet and the Sustainability Management
Team of Kia Motors.
FOR MORE INFORMATION ABOuT KIA MOTORS, VISIT www.kia.co.kr or www.kmcir.com/eng/index.
aspx
TO VIEW THIS REPORT ONlINE, SEE englishdart.fss.or.kr (Repository of Korea’s Corporate Filing) or
www.kmcir.com/eng/index.aspx (Kia Motors website)
CONTACT: Sustainability Management Team, Planning Division of Kia Motors
By raising its competitiveness to world-class levels, Kia has been given the great responsibility to guide the growth of its national economy for the 21st century.
• Contribution to Society and
Country
• Promotion of Shareholder and
Customer Interests
• Respecting Human Rights and
Fostering Future Talent
• Establishing Respectable
Partnerships between Partners
• Establishing Transparent
Management
Code of Ethics Adoption
Strict Ethical Compliance
in Acquisitions Department
Adoption of Code of Ethics
Regulation of Workplace Ethics
Regulation of Gifts and Bribes
18
structure of Business ethics
Sections
Institutionalized Code Kia Motors’ Code of Ethics
Regulation of Workplace Ethics
Employee Ethics Compliance
Cyber Audit Office Cyber Call-in Center
Production and Distribution of Employee Ethics Guidelines
Ethical Guideline Publication and Cyber Ethics Education
19
community engagement
Kia Motors believes that community involvement is a natural extension of corporate social
responsibility as an active member of the community. Community service demonstrates the
company’s appreciation for its stakeholders and the community who have supported its
growth and made it possible for Kia’s current success. Kia Motors believes that the community
must be healthy in order for sustainable development to be successful. For this reason, Kia
adopted community outreach and service as its third criterion in its sustainable management
policy and continues to expand the scope and scale of the activity.
In 2005, Kia started a community service slogan, “Moving Together with the World,” to
move towards a better future with neighbors and the greater community. Kia’s community
activities encouraged comprehensive future-oriented activities as social welfare,
environmental preservation, next-generation growth support, cultural arts, healthy living
promotion and international exchange. Of those, Kia further focuses on motor safety and
convenient motor use within its community service activities. For example, Kia Motors started
the “School Zone Keeper Campaign” and other traffic safety campaigns to raise public motor
safety awareness. Also, the “Easy Move” vehicle development and accessibility campaign
creates a friendly transportation environment for persons with disabilities. Through these and
other programs, Kia employees have volunteered their time and energy to reach out and
serve the community. With the launch of overseas production facilities in 2007, overseas
headquarters and production facilities conducted community service in each of their
respective communities to reach the greater global community. Every part of the
organization, internally and externally, has taken active part in the effort to make sustainable
development successful.
Expansion of Motor Safety Culture
• Child Safety Motor Education
• School Zone Keeper Campaign
• Support Program for Traffic Accident
Victims and Surviving Children
Improving Motor Environment for the
Disabled
• Easy Move Vehicle Development and
Accessibility
• Improving Accessibility
• Supporting Disabled with Special Shoes
and Safeguards
Regional Social Projects
• Cultivation of the Environment and
Young Talent
• Development of Local Community
Employee Volunteer Work
• Social Volunteer Groups
• Volunteer Work by Affiliates
Kia Motors and Its Affiliates
Expansion of Motor Safety
Culture
Regional Social Projects
Employee Volunteer Work
Improving Motor
Environment for the Disabled
corporate governance
and board
Kia Motors’ corporate governance is a system created to insure soundness and transparency
of the corporation and manage the interest of Kia executives, shareholders and employees.
Kia Motors’ governance structure consists of the Board of Directors, the Board Committee
who voices the opinion of the external stakeholders, Audit Committee who closely watches
over the corporate management, the Board Nominating Committee, and the Ethics
Committee.
Board of directors
The Board of Directors is responsible for oversight and supervision of the overall affairs of the
company. More specifically, the Board of Directors not only undertakes the duties of the
articles of association as well as the duties entrusted by general meeting of shareholders, but
also oversees the company’s overall policy and management of the business. Additionally, the
board will appoint one of its members to be the chairperson of the Board to supervise
management. The Board of Directors consists of four inside directors and five outside
directors. The Board will meet regularly at appointed times and more meetings will be held as
needed.
Performance-oriented Compensation _ Kia Motors CEO, executives and senior managers
receive annual salaries which are determined by both personal achievement and
performance.
committee
Audit Committee _ The Audit Committee consists of four outside directors. The Audit
Committee’s role includes monitoring the fairness and transparency of business practices,
auditing the company’s operations, and investigating the company’s assets to assess business
performance. The Audit Committee also discusses the minutes of the annual shareholders and
Board of Directors meetings.
Board Nominating Committee _ The Board Nominating Committee consists of two outside
directors and two inside directors. The two outside directors are chosen at the annual
shareholders meeting.
20
the BoaRd of diRectoRs and committees
Board of Directors Ethics Committee
Board Nominating Committee
Audit Committee
21
Ethics Committee _ The Ethics Committee consists of five outside directors. The main goal of
the Ethics Committee is to maintain fair and transparent business practices. To achieve that
goal, the Ethics Committee reviews the "Monopoly Regulations and Fair Trade Law," enforces
the stipulation on favoritism in personal relationships in the "Securities Exchange Act," and
Committee’s responsibilities also includes reviewing and evaluating community engagements.
Lastly, the Ethics Committee reviews the Code of Ethics and Code of Conduct within the
company and makes amendments to the Codes when deemed necessary.
Board structure as of December 31, 2007
Composition
Internal
External
Name
Mong-Koo Chung
Eui-Sun Chung
Nam-Hong Cho
Hee-Bong An
Jong-Chang Kim
Jong-Am Chung
Yul Choi
Dong-Sung Cho
Gun-Soo Shin
Position
Member of Board Nominating Committee
Member of Board Nominating Committee
-
-
Member of Board Nominating Committee,
Chairperson of Audit Committee, Member
of Ethics Committee
Member of Board Nominating Committee,
Auditor, Chairperson of Ethics Committee
Auditor, Member of Ethics Committee
Auditor, Member of Ethics Committee
Member of Ethics Committee
Remarks
Chairperson of Board
shareholders’ Rank as of december 31, 2007 (over 5% ownership)
Rank
1
2
3
Shareholder
Hyundai Motors
Credit Suise Financial
Treasury Stock Union
Number of Shares
134,285,491
29,583,586
24,719,219
Ratio of Shares
38.7%
8.5%
7.1%
2007 membership status of corporate associations
NO Association Membership Grounds
01 Federation of Korean Industries Mandatory
02 Korea Automobile Manufacturers Mandatory
Association
03 Korea International Trade Association Mandatory
04 Korea Economic Organization Council Mandatory
05 Korea Chamber of Commerce & Mandatory
Industry
06 Korean Federation of Science and Mandatory
Technology Societies
07 Korea Industrial Technology Mandatory
Association
08 Korea Management Association Necessary
NO Association Membership Grounds
09 Fair Trade Commission Necessary
10 Korean American Friendship Necessary
Association
11 Korea Association of Machinery Necessary
Industry
12 Ethical Management Forum Necessary
13 Korean Standards Association Necessary
14 Korea Logistics Association Necessary
15 Korea Association of Industrial Necessary
Designers
16 Korea Council for Sustainable Necessary
Development
For a car, the road is where it will find its true existence.
For a business, sustainable growth is the path that will add meaning to its existence.
When 20,000 moving parts come together, life of the automobile
begins. The power that moves the world comes from those that
gathered under the name of Kia Motors from all corners of the world.
The first mission of the company is generating profits. But Kia is not
only looking to add growth in the few sparks of visible performance.
Instead, Kia sets its goal in tune with long-term sustainable
development. Korea, China, Slovakia, the United States, Europe and
Asia all gather to create the Kia Motors that is known around the world
today and are paving the way for the future.
econom
ic v
alue
Kia Motors is focusing on enhancing profitability, strengthening global management,
introducing flexible manufacturing systems and innovating corporate culture to realize
its goal of creating sustainable economic value. 2007 was an especially important year as
Kia announced the launch of its design management system, through which Kia will
enhance its brand value and aggressively roll out a differentiated Kia Motors design
identity.
KEy AChIEvEMEnTS And plAnS
CrITICAl ISSUES
Financial performance
In 2007, Kia Motors recorded operational losses due to a worsening business environment
that included high oil prices and a strengthening Korean currency. However, the business
loss contingency buffer created in 2006 and operating profit from the fourth quarter of
2007 allowed Kia to fortify the company’s financial health to respond to any changes in
the volatile business environment. A variety of new cars announced for 2008 will further
improve Kia’s financial performance.
Brand Equity
In 2007, the domestic and international communities recognized Kia Motors’ highly
competitive product quality by bestowing high marks in product quality and safety
evaluations. Kia has strengthened its design competitiveness and continuously improves
quality, which will ultimately translate into stronger brand recognition.
2007 performance• Promotion of Total Cost Innovation (TCI) • Quality improvement: IQS rises 12 spots• Erected a solid foundation for future growth
2008 plans• Secured successful entry into the new car market• Focused on strengthening total sales capacity
2007 performance• Established production plant in Slovakia• Established second production plant in China• Established new Kia Motors Europe headquarters
2008 plans• Strengthen global capability• Raise overseas subsidiaries’ profitability
2007 performance• Early operational stabilization and met mass-production schedule deadline • Secured engine and transmission production flexibility
2007 performance• Fostered active corporate culture through bulletin board encouragements• Established and spread Kia Motors vision
2008 plans• Revitalize organization and improve corporate culture
Business profitability as
top priority
Build a flexible manufacturing system
Innovate corporate culture
Laid foundations for global
management
+ + +
Innovation for humanity (Innovation for Customers)
(1) HPV (Hour per Vehicle): The time it takes to build one car
(2) Organizational efficiency: the effectiveness of human resources management
(For example: if efficiency is below 60%, then 1.67 workers will do the work of 1 worker)
24
Disclosure on
management approach
25
The automotive industry’s activities have a wide ripple effect on other industries, ranging from
materials and equipment, to parts and manufacturing, transportation, sales and maintenance, oil,
insurance, and banking industries. The automotive industry has potential for high economic
growth and job creation as a leading labor-intensive national industry based on economies of
scale. In 2007, the domestic automotive industry and related industries employed an estimated 1.5
million persons, which represented 10% of total national employment. Last year alone, the
domestic automotive industry accounted for 14% of total national exports, amounting to
approximately 17% of the national tax revenue.
Hyundai and Kia Motors comprise Korea’s largest national automotive group and together
hold 75% of the domestic automobile market. As the leader of the Korean automotive industry,
the Hyundai-Kia Automotive Group is the driving force behind the nation’s economic
development. As a convenient mode of transportation for goods and people, the automobile
sustains modern life and economic activities. Kia Motors is Korea's second largest automobile
manufacturer with a sales network and production bases spanning 165 countries. As a global
company, Kia Motors has played a major role in the sustainable growth of national and
international economies by raising transportation convenience while minimizing its impact on the
environment. Through responsible corporate management at the national and international
levels, Kia will grow together with its stakeholders.
KEy MAnAgEMEnT ACTIvITIES And AChIEvEMEnTS In 2007
Kia Motors faced many difficulties in 2007 amidst a harsh business environment that was plagued
by high oil prices, currency exchange volatility, and the sub-prime crisis in the U.S. Even during this
difficult time, Kia maintained its focus on long-term sustainable growth and strengthened its
foundation for the future.
Kia Motors’ business activities in 2007 can be summarized into two parts: enhancing
profitability and laying the groundwork for future growth. Last year, Kia Motors addressed its goal
of enhancing profitability by improving product quality, boosting productivity and reducing costs.
Kia’s focus on product quality resulted in receiving top marks in quality surveys conducted by
independent research firms in the United States and Europe, thereby placing Kia’s quality in the
top tier among the world’s automakers. On the service front, Kia placed utmost attention on
operating performance
securing “customer satisfaction” as a top priority. As a result, the Korean Standards Association’s
'Korean Call Center Service Quality Index' survey ranked Kia’s customer service in first place, while
the 'Korean Service Quality Index' survey ranked Kia’s overall customer service in first place for the
fourth consecutive year. (1) Kia is becoming a company known for its customer service and
satisfaction. In addition, Kia introduced a design management system in order to secure
competitiveness and differentiate Kia Motors’ vehicles from the rest of the pack.
With the core business objective of strengthening international competitiveness, Kia erected
the Slovakia plant, a new European headquarters complex and a second production plant in China.
These facilities have secured the base for stable global production and sales capability for the
future.
Efforts made in 2007 have become a stepping-stone for 2008. Kia has laid out the key
challenges of “establishing a sales-oriented management system,” “securing profitability,” and
“strengthening core competencies” in 2008. The company’s goals for 2008 are the delivery of 1.69
million vehicles at home and abroad while achieving 23 trillion won in sales and operating margin
of 3%. With the release of the Borrego (Mohave) in January 2008, Kia is set to launch its restyled
Lotze (Optima/Magentis), next generation Spectra (Cerato), and all-new Soul for 2008. Two new
models are further planned for release in 2009. Enhancing its product lineup with the launch of
new models, Kia has orchestrated a turning point for sales recovery.
Kia will innovate management to ensure sustainable growth regardless of the business
environment. In 2008, the design management system will be leveraged to raise brand equity. In
order to establish an excellent workplace for employees,(2) the Great Work Place (GWP) program
was initiated to form close personal relationships among employees, the company’s first corporate
customer. In addition to building efficient overseas networks, Kia plans to conduct various
employee-training programs to strengthen global capacity in every sector of its business.
26
(1) More information on customer services can be found in the social value section of this report.
(2) Great Work Place refers to a workplace with three essential elements: a place where mutual trust between labor and management exists,
a place where employees are proud of their work, and a place where employees enjoy working together.
AnnUAl prodUCTIon Unit: Vehicles 2007 prodUCTIon By plAnTS Unit: Vehicles
total Domestic plants Overseas plants
236,628
387,579345,806
105,538148,569 145,158
Sohari Hwaseong Gwangju Seosan China Slovakia Total
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
400,000
300,000
200,000
100,000
0
2005 2006 2007
1,105,431
1,215,502
110,071 120,480
250,696
1,150,397
1,270,877
1,118,582
1,369,278 1,369,278
500,000
600,000
700,000
800,000
900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
400,000
300,000
200,000
100,000
0
24
2532
33
Disclosure on Management Approach
operating performanceFinancial Highlights
Special Story: Design Management, Global Management
goAlS And AChIEvEMEnTS By SECTor
production and Sales
Despite high oil prices and unfavorable exchange rates in 2007, Kia Motors succeeded in boosting
production and sales. The production plant in Slovakia, for example, exceeded its first year sales
target. Although domestic production fell slightly, Kia Motors enjoyed an increase of 7.7% in total
production and doubled overseas production capacities from 2006 thanks to overseas production
achieving full operational capacity along with strong sales generated in Europe.
Although domestic sales rose only slightly, exports significantly increased. Since the first-ever
export of 10 Brisa pickup trucks to Qatar 32 years ago, annual exports totaled more than one
million vehicles for the first time. Kia’s continual effort to nourish the company’s growth produced
fruits of success as operating losses in 2006 were minimized and there was a return to operating
profit in the fourth quarter of 2007.
Key production performance and plan _ Although domestic manufacturing production fell
slightly, overseas production grew by 7.7% from last year with total production of 1,369,278
vehicles. Notable achievements in the manufacturing sector include creating an efficient logistics
system and Global Maintenance Management System (GMMS).(3) In 2006, Kia became the first
Korean company to utilize an advanced logistics system with Radio Frequency Identification (RFID) (4) during the manufacturing process. In 2007, Kia established the UCLIP system(5) to improve
reliability of its logistics system, share information with business partners in real time, and manage
inventories efficiently. With the UCLIP system in place, Kia Motors achieved cost reduction and a
competitive edge in the marketplace. Additionally, by using GMMS, it ensured increased capacity
and productivity while reducing costs through efficient management. Currently, Seosan and
Gwangju Plants utilize RFID, but the RFID system will be expanded to all Kia Motors facilities in the
future.
In 2008, Kia set its sights on improving product quality and achieving stable production
through the extension of domestic and overseas production facilities. Kia is planning to introduce
27
010203
04
01. Breaking Ground for China’s Second Manufacturing Plant
02. European Sales Office and Design Center in Kia Motors’ New European Headquarters
03. Transporting Kia Motors’ Vehicles at the Slovakia Plant
04. Eva Yanashova, Slovakia Plant Employee
(3) GMMS (Global Maintenance Management System)
(4) RFID (Radio Frequency Identification): Through Wireless and IC chips, RFID manages information through a variety of
next-generation object-recognition technologies
(5) UCLIP (Ubiquitous Cooperated Logistics Information Platform System): RFID-Integrated Logistics Information
(auto parts, logistics, finished vehicles) sharing system between small and medium-sized businesses (SMBs) and Kia Motors
zooM In » Kia Motors in Udmurtia, russia
MInI InTErvIEW » Eva yanashova, Kia Motors’ plant in Slovakia
“Kia motors created 10,000 jobs in Udmurtia”
On March 2007, Alexander Alexandrovich Volkov,
President of the Udmurt Republic, expressed his
gratitude for the contribution of Kia Motors to
the economy of Russia. Since 2005, Kia Motors has
manufactured the Cerato (Spectra) in the IshAvto
plant in Izhevsk, the second largest automotive
producer in Russia. Cerato (Spectra) is the best sell-
ing car in the Russian market.
According to Mr. Volkov, “Just one Kia Motors
assembly line created 2,700 jobs. It is supporting
approximately 10,000 citizens as it creates jobs
from affiliated business partners and surrounding
businesses. Introducing a cutting-edge Spectra
(Cerato) assembly line to Udmurtia expanded social
benefits to employees and increased tax revenue to
Udmurtia.” He welcomes a larger Kia Motors pres-
ence in Udmurtia.
“Everyone’s impressed when I tell them I work for
Kia motors.”
Hello, I’m Eva Yanashova of Kia Motors Slovakia.
Working for Kia Motors is a source of pride in
Slovakia. With high pay and great benefits, Kia Mo-
tors is the best place to work. Many friends of mine
want to work for Kia Motors and ask about open-
ings at the plant. Kia Motors has superior benefits
for female workers in comparison to other plants
in Slovakia. Recently, I read in the newspapers that
Kia Motors has created more than 8,000 jobs in
Slovakia along with new infrastructure. Kia Motors
is making our city a better place to live. Thank you,
Kia Motors.
0102
28
01. The refreshed for 2008 Morning (Picanto) has posted high sales figures.
02. Ceremony for the 100,000th cee’d produced at the Slovakia plant in September 2007
(6) More information on overseas facilities can be found on pages 34 to 35.
* ‘Others’ include commercial and specialty vehicles.
AnnUAl SAlES Unit: Vehicles SAlES By CATEgory Unit: Vehicles
total sales Domestic sales Overseas sales total sales passenger car RV Others
2005 20052006 20062007 2007
a Gamma engine facility with annual output of 100,000 units for small- to mid-sized engines in the
Hwaseong plant. The Gwangju plant specializes in bus production, and it is pushing to finish
renovation of production lines to churn out 2,100 buses a year such as the Granbird. As for
overseas manufacturing facilities, Slovakia has been fully operational since last year with an annual
production capacity of 300,000 vehicles, and Kia’s second plant in China came online in December
2007 with an annual production capacity of 300,000 vehicles. The construction of the U.S.
manufacturing facility in Georgia, which began in 2006, is on track for completion in 2009 with an
annual capacity of 300,000 vehicles. Kia is expecting its overseas annual production capacity to
reach 1.03 million vehicles by 2009. This global expansion will contribute to the stabilization of
production and sales while raising Kia’s brand equity.(6) In 2008, Kia Motors is aiming to produce
1.69 million vehicles (1.215 million and 0.475 million vehicles at home and abroad, respectively), an
increase of 23.5 % from last year.
Sales division Key performance and plan _ In 2007, Kia Motors’ domestic sales rose 0.8 %
with 271,809 vehicles. The domestic market shrank approximately 30% last year compared to 2002
due to high oil prices and the falling exchange rate, which devastated the export market and
created a rough year for every domestic automaker. Although no new models were introduced in
the stagnant domestic market, Kia launched restyled models with enhanced marketability and
environmental performance, while expanding customer marketing. These strategies allowed Kia
to weather the worsening market environment and end the year with improved sales and lower
operating losses. In the sedan segment, Opirus (Amanti) recorded first place in sales for 19
consecutive months, and the refreshed super compact Morning (Picanto) posted high sales volume
in the latter half of 2007. The sub-compact Rio (Pride) and Sportage compact SUV maintained top
market share in their respective segments as well. Recovery in the domestic market for 2008 is not
expected. By launching new models and enhancing customer satisfaction, however, Kia will
achieve its target sales goal of 322,000 vehicles and 25% market share in 2008.
265,825
623,151
1,215,849 1,215,849
950,024
481,422
111,27685,592 82,113
989,276
511,167
1,088,147
490,607
269,575
662,092
1,258,851 1,258,851
271,809
787,236
1,359,956 1,359,956
500,000 500,000
600,000 600,000
700,000 700,000
800,000 800,000
900,000 900,000
1,000,000 1,000,000
1,100,000 1,100,000
1,200,000 1,200,000
1,300,000 1,300,000
1,400,000 1,400,000
400,000 400,000
300,000 300,000
200,000 200,000
100,000 100,000
0 0
24
2532
33
Disclosure on Management Approach
operating performanceFinancial Highlights
Special Story: Design Management, Global Management
Kia’s overseas sales division made significant accomplishments through export market
diversification and a stable global production system this year. Kia Motors enjoyed a sales
breakthrough with exports of 1,088,147 vehicles, a 10% increase from the previous year. Kia
focused on Asia, the Middle East, Central and South America, and emerging markets. These
diversified markets allowed Kia to increase exports by 26.3 % from the previous year. In addition,
Kia overcame difficulties and posted a 7% export increase despite high oil prices and the U.S. sub-
prime crisis. With successful operation of the manufacturing plant in Slovakia since last year, Kia
also grew by 10% in the European market.
Right on the tails of US and Europe, China is quickly emerging as one of Kia’s largest markets.
Although sales fell slightly last year in China, as many automakers introduced new models and
fierce price competition ensued, Kia plans to aggressively tackle the Chinese market with increased
production from its second plant in China and new models that satisfy Chinese consumers’ needs.
Kia expects the 2008 overseas market environment to stay unfavorable as oil and raw material
prices continue to increase and the dollar value remains low. Despite the worsening business
environment, Kia has set ambitious goal of exporting 1.363 million vehicles, a 25.2% increase from
2007. Kia plans to meet this goal by strengthening its product line-up, nurturing emerging
markets, taking advantage of its overseas production base, increasing dealer capacity, introducing
a 5-door Cerato (Spectra) designed exclusively for the Chinese market, stabilizing China’s second
plant, and expanding its overseas sales network.
Quality and r&d
In 2007, Kia Motors fortified its design capability, developed advanced technologies, reduced costs
and implemented quality assurance systems. Through these efforts, Kia received glowing reviews
on product quality from independent research firms, thereby raising its brand equity.
Key Quality performance and plan _ In 2007, Kia Motors received accolades from around the
world as its products earned top marks in product quality from various distinguished independent
research firms. More specifically, Kia is proud of its success in the U.S., most notably its results in
J.D. Power and Asociates’ 2007 Initial Quality Study (IQS), in which Kia’s ranking jumped 12 spots
from 2006 to 12th place overall, thus placing Kia in the top tier of automakers. The company’s
subcompact sedan, Pride (Rio), played a major role in enhancing brand value as it took first place
in the subcompact segment in both the 2006 and 2007 studies. Furthermore, the Total Quality
Study (TQS) by Strategic Vision (an American automotive research firm), U.S. Consumer group’s
Consumer Reports, and the European Car of the Year (COTY) jury all gave rave reviews about Kia’s
vehicle quality.
Kia works tirelessly to develop top-quality vehicles in order to become consumers’ number one
preference. For example, extensive tests are conducted to match driving performance with
intended usage and environment when designing a new vehicle. Kia has revitalized customer
services, such as the Auto Prosumer Systems, to reflect customer needs and wants. In addition, Kia
29
* ‘Others’ include commercial and specialty vehicles.
01. Kia Motors representative receiving the JD Power and Associates’ IQS award for the Pride (Rio) as a segment winner
02. 2008 Quality Meeting for acquiring top IQS ranking
Sales by region Unit: In million won
Total sales
Korea
overseas
north America
Europe
others
2007
15,948,542
4,852,075
11,096,467
4,879,604
2,860,028
3,356,835
2006
17,439,910
4,867,129
12,572,781
5,144,229
4,295,839
3,132,713
2005
15,999,356
4,471,757
11,527,599
4,297,325
4,492,756
2,737,518
2004
15,257,742
4,241,228
11,016,514
4,989,520
3,655,789
2,371,205
2003
12,839,881
5,126,358
7,713,523
3,731,397
2,145,117
1,837,009
2002
12,158,113
6,304,394
5,853,719
3,344,308
1,071,728
1,437,683
0102
30
0102030405
060708
vehicles rating history
vEhIClE QUAlITy EvAlUATIon In 2007
• Germany, Autobild, C-segment (1st place tie with VW golf)
• Austria, Autotouring, 1st place
• U.K., Practical Caravan, What Car?, and Camping and Caravan Club
eco-friendly vehicle and best hatchback
• Germany, ACE Lenkrad, C-segment 1st place
• Europe, 5 stars front and side impact tests, European New Car
Assessment Programme (Euro NCAP)
• Europe, 1st place in European COTY C-segment (4th place overall)
• Romania, 1st place COTY
• 1st class in offset impact evaluation by Korea Automobile
Technology Center
• U.S., 5 stars in impact tests by National Highway Traffic Safety
Administration (NHTSA)
• U.S., Consumer Reports Recommended model
• U.S., The Car Book “Best Bet”
• U.S., “Highest Ranked sub-compact car in Initial Quality Survey (IQS)”
By J.D. Power and Associates
• U.S., 5 stars in impact tests by the National Highway Traffic Safety
Administration (NHTSA)
• U.S., Best Medium SUV Ownership Experience in Total Quality Award
from Strategic Vision
• U.S., Highest possible rating in rear impact evaluation from Insurance
Institute for Highway Safety (IIHS)
• U.K., < Caravan Club Tow Car awards 2008> 1st place in Full-size 4X4
segment
• U.S., The Car Book “Best Bet”
• U.S., Motor Week “Best Minivan” from 2007 Drivers’ Choice Awards
• 1st place in minivan segment for five consecutive years according to
Korea Management Association Consulting
• U.S., 1st place in Total Quality Award of Strategic Vision for
Best Minivan Ownership Experience
• Australia, Royal Automobile Club of Victoria “Lowest cost of
maintenance”
• U.S., Highest possible rating in rear impact evaluation by Insurance
Institute for Highway Safety (IIHS)
• U.S., 2nd place in Automotive Performance, Execution and Layout
(APEAL) Study by J.D. Power and Associates in 2007
• U.S., Forbes “The safest family car”
• U.S., Highest possible rating in safety evaluation by Insurance Institute
for Highway Safety (IIHS)
• U.S., The Car Book “Best Bet”
• U.S., US News & World Report, Best affordable Compact Wagon
• U.S., The Car Book “Best Bet”
• 1st class in offset impact evaluation by Korea Automobile
Technology Center
• U.S., Consumer Reports Recommended model
• U.S., Highest possible rating in side impact evaluation by Insurance
Institute for Highway Safety (IIHS)
cee’d
sportage
pride (Rio)
sorento
carnival (sedona)
cerato (spectra)
Lotze
(Optima/magentis)
Opirus (Amanti)
01. cee’d
02. Sportage
03. Sorento
04. Cerato (Spectra)
05. Lotze (Optima/Magentis)
06. Pride (Rio)
07. Carnival (Sedona)
08. Opirus (Amanti)
24
2532
33
Disclosure on Management Approach
operating performanceFinancial Highlights
Special Story: Design Management, Global Management
is stabilizing production lines and ensuring that its suppliers deliver high quality parts to gain a
competitive advantage through higher end-product quality. For overseas facilities, the quality
control manual, which consists of 10 categories with 180 checklists, is being prepared to improve
the product quality control system and enable them to perform their own internal quality control.
With a stabilized on-site work management system, Kia is working in overseas manufacturing
facilities to produce new models under strict quality control at an early stage.
Kia is never satisfied with past performances. Thus, despite excellent reviews on product
quality in 2007, Kia will make every effort to surpass 2007’s performance in 2008. According to the
Initial Quality Survey (IQS), Kia’s overall quality has improved by 53% since 2001. Kia’s
improvement is the result of the steadfast belief that product quality is the foundation of
competitiveness. Kia Motors is continuously improving product quality and raising brand value so
that customers will not only acknowledge the brand, but go beyond and recognize the brand as a
product that can be trusted and driven. For this to happen, Kia has taken three measures to insure
product quality. First, Kia comparatively analyzes its products against competitors to improve their
perceived quality. Second, Kia proactively checks quality parts for defects before they enter the
production cycle through careful monitoring of suppliers. Third and lastly, Kia has established a
three-tier quality inspection process to prevent problems in the production cycle to meet the
“Drive Defects to Zero” challenge.
r&d performance and plan _ In 2007, Kia’s R&D efforts concentrated on creating innovative
designs, strengthening technology and improving cost competitiveness through cost innovation.
Kia’s concept cars, based on the "simplicity of a straight line" design concept, captured the
world’s attention at numerous motor shows. The concept car line up included the 'Kue' large CUV,
‘ex_cee'd' convertible coupe, 'KND-4' mid-large size SUV, and ‘Kee’ sports coupe. In terms of cost
innovation activities, Kia came up with 20,000 cost saving ideas centered around streamlining
design and developing new materials with active participation from employees. Kia then
successfully implemented these ideas into its vehicles to improve profitability. Digital development
of automobiles and shared platforms and components are just some of the methods Kia is
exploring in order to save costs. But Kia is always looking for permanent cost saving solutions.
In order to strengthen Kia’s technological competitiveness, the company must focus its
attention on the development of eco-friendly and intelligent cars. To achieve that end, Kia has
formed a close partnership with parts suppliers and affiliated companies to secure electronics,
materials and environmental technolog components critical to the industry.(7) Additionally, the
Namyang R&D Center is the epicenter of support for the Eco-Technology Research Center and
overseas R&D Centers (United States, Europe and Japan) to strengthen its global technological
competitiveness. As a result, Kia received a favorable response from the European market when
launching the cee’d 3-door and wagon models. At the same time, in China and the emerging
markets, Kia strengthened R&D capabilities to respond immediately to local customers with
customized vehicles. For example, Kia has received superb response in China from models like the
Cerato (Spectra), Sportage, and Pride (Rio) with modified colors and body shapes that reflect the
tastes of local customers.
31
01. “ex_cee’d” convertible and “Kee” sports coupe receive worldwide attention at motor shows
(7) More information on the technology for eco-friendly vehicles, strategies for climate change and the technology for
intelligent vehicles can be found in the Environmental Value and Social Value sections, respectively, in this report.
01
Brand Management
Last year, Kia focused more on improving its core
brand values to spur more business activities
for sustainable growth. Kia continues to launch
tailored vehicles to match customer needs. Kia
will focus on today’s growth as well as tomorrow’s
anticipated trends in order to become a top global
brand.
Brand Management
PHASE 1
2005-2007laying a solid foundation for brand management • Brand management plan announced • Execution of the plan by division/region
PHASE 2
2008-2010Strengthening brand management • Build a system for brand management and evaluation • Launch new models with brand identity partially reflected
PHASE 3
2011-2015Accelerating brand management• Launch new models with brand identity fully reflected• Reinforce Global Brand Management System
production (vehicles)
Sales (vehicles)
Sales
operating profit
operating profit rate
Cash Flow(1)
Earnings Before Tax (EBT)
net Income
value offered to Stakeholders Unit: In million won
32
Key figures
2002
1,013,616
897,722
12,158,113
652,315
5.37%
2,105,670
851,393
670,820
2005
15,999,356
12,503,862
3,495,494
612,815
2,882,679
1,975,208
284,313
23,009
112,349
487,800
2003
852,797
858,697
12,839,881
805,537
6.27%
1,457,333
937,526
752,857
2006
17,439,910
14,085,595
3,354,315
709,719
2,644,596
2,155,284
310,574
26,097
152,641
0
2004
1,019,366
1,011,429
15,257,742
513,063
3.36%
1,621,855
840,078
662,026
2007
15,948,542
12,572,988
3,375,554
676,396
2,699,158
2,119,226
333,000
26,299
220,633
0
2005
1,105,431
1,105,841
15,999,356
74,002
0.46%
438,760
689,405
680,904
2006
1,150,397
1,140,734
17,439,910
-125,291
Deficit
-231,550
73,213
39,337
2007
1,118,582
1,114,451
15,948,542
-55,404
Deficit
28,240
24,968
13,563
Sales
Business partners
costs of goods and service
value-added Creation
Internal Buffer for facility and R&D Investment
Value Offered to stakeholders (Excluding Business partners)
Employees Total Wages
Benefits
Public Sector Tax and Cost of Social Contributions
Financial Investors Interests
Shareholders Dividends
* Based on 2007 Annual Report (excluding CKD and overseas production)
(1) Cash Flow from Operating Activities
• material costs
• Depreciation Expenses
• Value Offered to stakeholders (Excluding Business partners)
4.3%
16.9%
1.0% Government and Public Sector 90.8% Employees
8.2% Shareholders and Financial Investors
78.8%
Key Figures Unit: Vehicles, In million won
Kia Motors' advertising campaign slogan, “DE? GN,” sums up its design philosophy in one word.
“Design” does not merely mean the exterior shape or style of the car. Instead, “DE? GN”
demonstrates how Kia Motors is finding innovative answers to endless questions in order to improve
customer lifestyles with safe and convenient vehicles. In the slogan, “?” of the “DE? GN” designates
“curiosity,” just like the symbol itself. “ ” is a lightbulb that symbolizes “Idea” for solutions. Also,
“ ” carries a bigger meaning as it represents change, innovation and the creative mind of Kia
Motors’ “identity” that will foster the company’s endless growth.
design differentiation through differentiated brand identity
To establish a unique design identity for the company, Kia hired Peter Schreyer, a European
automotive designer touted as one of the top three in the world. Peter Schreyer became Chief Design
Officer of Kia Motors in 2006 to head Kia Motors’ global design initiatives and is based at Kia’s new
Europe Design Center which opened in September 2007. Kia Motor’s Europe Design Center is
responsible for strengthening competitiveness through innovative design. Peter Schreyer summed up
Kia Motors’ future design direction as “Simplicity of the Straight Line.” “Simplicity of the Straight
Line” means honest, simple but elegant design with aerodynamic forms to enhance driving
performance. It is the culmination of a perfect combination design elements.
• Establishingsupportplans for partners• Evaluatingpartner’s eco-friendly management• Trainingeco-friendly management and providing technical support(1)
• SupportingEMSconstruction• Evaluatingpartnersand offering incentives• Partners’registration management and other policies• Supportthrough participation of government environmental project(1)
Partners
• Trainingandconsulting servicesrequest (Evaluationoncompliance with environmental regulations and training on eco-friendlymanagement)• Technicalsupportrequest• Environmentalsolution request• Environmentalissue identificationandsubmitting improvement results
• Improvingcompanyimage• Providingafoundationfor sustainable development
Establishingreductiongoals and activity strategy for the discharged volume of greenhouse gasesExpandingontheverificationonthedischarge volume of greenhouse gases (Includingoverseasfacilities and managing greenhousegasinEMS)
3rd PHASEPromoting the
Reduction of Discharged Volumes
2007~
corresponding Production Trends
countering climate change
distributing Eco-friendly vehicles
(Enforcement)
• Developinghybridelectricvehicles
• Developingfuelcellvehicles
• Expandingnextgenerationdieselvehicle
distribution
• Developingtechnologiesinfuelefficiency
enhancement
• DevelopingtechnologiesforCO2 reduction
Establishing the foundation for responding to the
Kyoto Protocol (Enforcement)
• Establishingthefoundationforgreenhouse
gas statistics
• Jointresponsewithacademia,governmentandNGOs
• TrainingandPRdomesticallyandoverseas
• Introducingsupportprogramsforbusinesspartners
• Executinginternaltransactionsystemsof
discharging rights
countering Synopsis of climatic change convention
Enhancing Energy Efficiency
(Enforcement)
• ReducingCO2 in the workplace
• Voluntaryagreementtoreduce
energy usage
• Recyclingofwastereduction
• Rationalizingthelogisticssystem
2nd PHASEEstablishment of
Strategic Corresponding
System
Verifyingthedischargedvolume of greenhouse gas(PilotprojectofKoreaEnergyManagementCorporation):Hwaseongplant Developingcomputationguidelines(ver.2.0)toestimate total discharged volume and develop inventorysystems(GEIKver.1.0)Verifyingtotaldischargedvolume of greenhouse gas:SohariandGwangjuplants,andA/Sdivision
2006
1st PHASEEstablishing
Corresponding Infrastructures
Verifyingplansregarding greenhouse gas discharge volumes, called“GreenhouseGasInspectionInfrastructurePlans”Benchmarking the correspondence of Japanese companies for countering climatic change conventionKorea’sfirstgreenhousedischargequantityThirdpartyverificationandgreenhouse gasDevelopmentofcomputation guidelines (ver.1.0)forestimatingquantityofdischarge:Hwaseongplant
Countless roads are built to facilitate convenient travel.
Our vehicles, our pride and joy, travel over these roads.
We bring peace of mind to our customers with never-ending efforts to
build safer vehicles for our customers.
Creating more convenient vehicles and preventing vehicular accidents
are the true profit of an automobile company’s responsibility.
Alleviating walking discomfort, attending to those working in the
vehicle production, as well as looking back at the people facing greater
hardship, Kia Motors will materialize the needs that will sustain the
company and society’s coexistence.
Kia Motors strives to maintain healthy relationship with two components of the
company’s driving force, its partners and employees.
Kia raised the bar with “Making a Great Work Place,” which boasts employees’
satisfaction, employment security, and employee’s rights protection. Kia is continually
expanding support for management stability and competitiveness of business partners.
Beyond offering excellent customer satisfaction, Kia Motors enriches lives with
comfortable reliable vehicles and active contribution to local communities.
Under the slogan, “Moving Together with the World,” Kia promoted harmony with
the community by contributing to the development of safer traffic culture and advancing
mobility for the people with disability and disadvantaged drivers. From 2007 onward, Kia
Motors continues to expand the community engagement with volunteer work and global
community activities.
MAteRiAlity AnAlysis Results
2008 Sustainability report amended expansive information in the social value section to
correct the inadequacies, noted in the last year’s stakeholders’ satisfaction survey. For the
issues below, Kia Motors’ categorizing system helped locate inadequacies in the report,
while valuable contents were organized into graphs to allow clarity of the data. Results
gathered from various outside parties are clearly organized for viewing.
78
Disclosure on
ManageMent approach
employees’ Rights and labor-Management RelationshipBenefits and trainingWorkplace safety
• Creating Jobs (for 220 people) and Awaiting Retirees Support• Running Committee of Employment Stabilities and Committee of Next Generation Management • “Making a Great Work Place” (Providing better benefits and training, events supported by employees, and cheerful culture)• Decreased 51 Industrial Accidents
Partnership supportFair trade settlement
• Operating Support System for Business Partners • Executing 5 Star System • Training Employees of Business Partners• R&D Partners Tech Day Meeting• Guest Engineering Program• Supporting Management Stabilization (Improving payment condition and financial support)• Joint Overseas Market Entry• 2nd Partnership Support Reinforcement• Settling Fair Trade System
Customers’ safetyCustomer service
• Development of Vehicle Safety and Intelligence• Demonstrated Superiority in Safety Evaluations • Awarded Best Service Satisfaction• Awarded 1st Place in Best Korean Standard- Service Quality Index (four consecutive years)• Awarded 1st Place in Superior Korean Standard-Service Quality Index by Korean Business Call Center• Operation of Auto Q Services and Before Services• Kia Motors America Awarded 1st Place in Best Website by J.D. Power and Associates
Community engagement
• Advancement of Transportation for the People with Disability and Disadvantaged Drivers (Easy Move)• Expansion of Safer Traffic Culture (Safe Move)• Employees Volunteer Services• Establishing Infrastructures for Regional Communities• Strengthening Global Community Service Activities• Total Expenditures in Community Engagement; 7.4 billion won
Employees Customers Local CommunityBusiness Partners
+ + +
79
Businesses focused only on the optimal allocation of resources and financial growth exposed
various problems. This initiated outcry from the world to change the corporate management
paradigm to focus on strengthening corporate responsibilities to the society. As a responsible
corporate citizen and a member of the community, Kia Motors seeks public and stakeholders’
optimal benefit, carefully dealing stockholder matters and working towards a common good.
Additionally, special attention is given to all stages of corporate earning distribution in a fair and
responsible manner with the stakeholders in mind. Large aspect of Kia’s community contributions
is creating new economic supplement to aid local communities and to further aid country’s
development. Kia Motors is generating economic values for local communities through job
creation, while its employees establish the company’s future values and aid in obtaining goals of
the sustainable management. Kia is made possible through people, just as Kia’s products are
made to better the lives of people. Caring for its employees is as important to Kia as its primary
goals of sustainable management growth and responsibility to the community.
eMPlOyees OveRvieW
employees and employment
On December 31st, 2007, Kia Motors reported a total of 32,977
employees. Through job creation, Kia seeks to improve the
economic value of its local communities and further improve
the nation’s economy. Each year through various public hiring,
Kia hires great number of new workers under equal
opportunity practice. In 2007, 220 new employees were hired.
employment loss Management and Retirees support
Kia Motors attributes foundation of business competitiveness
with hiring and retainment of highly valuable employees. In
order to comprehend the employees’ satisfaction, Kia examines and manages information
regarding employees’ age, gender, region, occupation changes and its turnover rates. For new
employees, Kia provides a mentoring system to aid the employees’ adjustment stage and prevent
skill relapses. Mentoring system is established through representatives of each department,
assigning team formations of either 1:1 or 1:3 to provide this system with guardianship. Once
employed, during the first six months, employees take turn at least once a month establishing a
eMployees
50,000
40,000
30,000
20,000
10,000
0
2005 2006 2007
32,745 33,005 32,977
total number of employees Unit: Employees
productive meeting to discuss various difficulties and socialize with other employees. In the
process of an employee’s retirement, Kia’s awaiting retirees are entrusted to outside consulting
agencies to provide psychological stability and facilitate reclamation of the employees’ own
paths. Kia also holds two weeks seminar to give valuable information regarding their health,
assets, and spare time management.
To raise employees’ morale by matching employees with their desired job, Kia utilize a system
of self-assessment report that are used to shift job position at the beginning of the following year
when any work difficulties or desired position are reported.
78
7992
97
104
111
Disclosure on Management Approach
employeesBusiness Partners
Customers
Community
Special Story: Communicating with Stakeholders
80
education for Awaiting Retirees
education Contents (a total of five days / 40 hours)
• Reality cognizance: retirement preparation, lifetime plan (prospectus), jobs after retirement, and sense of life
after retirement.
• Self care: image care, health care, and a happy marriage
• Future plans: property management, understanding and viewing company commencement, power resume,
and plans for off-hours.
number of trainees
• 37 retirees in 2006 and 26 retirees in 2007
Results from the satisfaction Report of Retirees
• “Contents are organized appropriately for the awaiting retirees that it will likely provide major help
after retirement.”
• “Education gave me friendly future direction and a welcome relief few months before the retirement.”
• “It was a period where I was given the chance to look back at life. My previously narrow outlook on life has widened
along with my heart.”
employees by Occupation Unit: Employees
Positions
2007
2006
2005
total
28,405
4,572
32,977
33,005
32,668
Other
183
-
183
336
395
sales
2,995
217
3,212
3,228
3,239
Research
108
140
248
250
253
technician
1,663
-
1,663
1,672
1,661
Production
21,711
21
21,732
21,774
21,554
General
1,745
4,194
5,939
5,745
5,566
union Member
non-union Member
* Standard for current employees based on assessment taken December 31st of each year.
employees by Occupation in 2007 Unit: Employees
employees’ location
Head Office
Apgujeong
Wonhyoro
sohari Plant
Hwaseong Plant
Gwangju Plant
R&D Center
Domestic Regions
Oversees Regions
total
Officer
-
-
-
-
-
-
-
-
2
2
General
30
2
1
22
50
17
11
3
-
136
Production
-
-
-
1
61
-
-
-
-
62
R&D
-
-
-
-
4
-
-
-
-
4
Privileged
4
-
-
3
7
2
-
-
-
16
total
34
2
1
26
122
19
11
3
2
220
Retirees for 2007 Unit: Employees
Categories
Head Office
sohari
Hwaseong
Gwangju
R&D Center
Misc.
total
ResPeCt FOR DiveRsity AnD PROteCtiOn OF HuMAn RiGHts
Formation of non-discriminatory and Open Work environment
Kia Motors does not discriminate on the basis of gender, race, religion, or social standing. Each
opportunity is given according to each employee’s individual abilities. Kia’s Employment Stability
Committee is securing full employment of Kia’s employees and building a relationship of trust.
According to employment manual and public standards, Kia follows processes of fair
employment, thereby insuring Kia Motors with competent workers.
Respect for employees’ Diversities
Kia Motors’ overseas facilities are currently located in the United States, China, and Slovakia. As of
2007 in Kia overseas operations, native employees account for 7,407 employees, making up 18.3%
of all employees. Kia is reviving many regions’ economies through employment, while founding
suitable environmental and cultural formations to create and support enjoyable working
conditions for the native employees.
The ratios of female employees make up 2.5% of Kia’s employees with a total of 833 female
employees. Currently, there are no females in management positions. Kia Motors practices
management activities with an open mind and accepts differences in perspectives. Kia is putting
efforts to equalize gender in the workplace by progressively employing women and providing
comfortable working environments for both employees.
81
* Head office consists of Yangjae, Apgujeong, Wonhyoro, and oversees regions, and R&D Center consists of Namyang,
Mabuk, Shihwa, and Sohari R&D center.
Regional Job Creation Unit: Employees
Categories
Head Office
sohari
Hwaseong
Gwangju
R&D Center
Misc.
total
* Head office consists of Yangjae, Apgujeong, Wonhyoro, and oversees regions, and
R&D Center consists of Namyang, Mabuk, Sihwa, and Sohari R&D center.
Job Creation Unit: Employees
2,500
2,000
1,500
1,000
500
0
2005 2006 2007
1,499
572
220
2005
96
75
93
64
766
142
1,236
2005
48
150
147
1,101
47
6
1,499
2006
80
73
46
68
7
77
351
2006
52
108
278
99
17
18
572
2007
70
59
47
67
4
60
307
2007
38
26
122
19
11
4
220
01. Slovakia Plant’s Native Employees
02. Kia Motors’ New Employees in 2007
0102
82
employee Wage Unit: Employees, In million won
Classification
total employees
Consecutive years of employment
Annual Wage
Wage per employee
2007
32,977
13
1,894,262
57
2006
33,005
13
1,844,824
55.90
2005
32,745
12
1,752,972
53.53
Personnel evaluation and Performance Based Compensation
Kia Motors preserves all matters regarding personnel evaluation, equal treatment of employees,
and job promotion management as stated in Article 36 of the Collective Agreement, and Article 4
in the Rules of Personnel Management. Employees are paid according to the wage criteria
regardless of gender and by objective validity of the employee’s duration of services. Personal
evaluation system objectively measures individual services for improving the employee’s
capacities. Promotion system requires that the official examination board makes consideration on
the basis of various diverse objective data to deal fairly and to advance further objectives.
employee Representative Assembly Guarantee
According to the 8th Article of the Collective Agreement, it secures union association and the
liberty of their activities. According to the 18th Article in Rules of Employment, if a dispute shall
rise between labor and management, disadvantages may not be charged to employees
participating in a strike. Agreement regulates that the labor and management settle their issues
through negotiations. In addition, for improvement of employees and social welfare, a
conference concerning the collective agreement and labor management is held every two years.
Deliberations regard factors such as cost of living, productivity increase, wage settlement, and
wage negotiations. In order to build collaborative labor relations, a Labor and Management
Council is being operated at least every three months.
The collective bargaining which applies to union members makes up 28,405 members. With
the exception of employees at or above management levels or positions managing any of the
company’s major policies, employees are allowed to obtain union membership. Through the
collective agreement, the labor and management mentions, “following the fundamental
mentality of Constitution and three labor rights, and the ILO, as being in a reciprocally equal
position to being under the faithful principles, union member’s labor conditions, maintenance
improvement, politics, economy, community, and cultural elevation of statuses,” thereby securing
rights and interests.
Human Resources Management
To efficiently resolve employees’ grievances, Kia Motors established consultation service standards
called Human Resources (HR) Ombudsman Services. Located in each business department, various
employees’ personal concerns of promotion or proposals regarding promotion-related operations
are treated and collected with additional aims to improving HR management policies. In addition
to each division, an “Employee Grievance Handling Committee” has been established to help
resolve concerns about an employee’s job allocation. Promotion management keeps all matters of
employees’ concerns confidential to prevent any discrimination against employees.
Correspondingly, in order to resolve employee rights, systems, or general matters, a civil corner
via intranet can be accessed by employees.
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education for Protection of Human Rights
To protect the basic rights and privacy of employees, Kia is raising protection standards especially
concerning sexual harassment. HR lectures and workshop programs are given to all employees
each year for sexual harassment prevention. Lectures educate employees with real life and legal
cases in a variety of sessions. Lectures are intended to raise moral consciousness in a societal
working environment with Kia Motor’s goal of obtaining its culture of gender equality. Personal
consultation services for employees are provided in addition to the establishment of personal
consultation committee for female employees.
Prohibition of Child labor and Forced labor
Kia Motors is pursuant to employment principles only accepting candidates of at least 18 years of
age. Following the 26th Article of the Collective Agreement, no enforcement of work may be
applied on holidays for labor extension. Kia does not take advantages of employees with labor
service extensions.
Win-Win PRACtiCe FOR eMPlOyees
Management Disclosure Practice
Following the 14th Article of Collective Agreement providing notification of liabilities, Kia Motors
is making great strides through management disclosure practices. Contents which require
notifications of alterations or changes are trades and incorporations and employment rules;
personnel regulations whereby affecting union members’ by regulations enactment and
reorganizations, appointment and dismissal of directors; position changes, employee
identification changes, audit reports, management performance, and decisions made by the
board of directors. Such notification matters are immediately transferred as documents in
effectively building positive reliability. With the above mentioned and separately, Kia Motors is
regularly (monthly, quarterly, and biannually) disclosing operating results to labor unions for
reciprocal understanding and improvement of joint efforts.
employees’ Management Participation
Employment Stability Committee formed by employees at Kia Motors, as well as Next Generation
Committee inducing active management participation, keeping ears open to employees’ views.
• Common Factor Management• Environmental Management• Safety Management• Health Management
statistical Data
+ + +
MAKinG A “GReAt WORK PlACe” (GWP)
Kia Motors strives through a variety of programs
for its employees to come in harmony and enjoy a
“Great Work Place”.
Last year, the Art Leum Museum opened art
spaces at the Yangjae-dong headquarters lob-
bies for Kia’s employees to enjoy the art and for
mental /physical recharge. For employees and their
families, Kia Motors presented education programs
such as “My father is an Art Ph.D.” In November,
Kia held Visions Festival for its employees to pro-
vide unified group vision and culture. Employees
participated in group activities and forums that
focus on the company’s group vision and culture of
encouragement for each other’s brighter future.
Employees also enjoyed the Company Brand Day
events where Employees’ families could participate
in enjoyable family programs.
industrial safety and Health training
Category
safety and Health
Maintenance
training during
stated Period
expertise
specialized training
total Hours
Annual training Hours per Person
Remarks total: 32, 977 trainees (2007 standard)
Production
Sales
Technical
General
Supervisor
Industrial Safety and
Health Committee
Member
Administrative Staff
for Musculoskeletal
Illness
Health Promotion
Training
Sohari
Hwaseong
Gwangju
Sohari
Hwaseong
Gwangju
Sohari
Hwaseong
Gwangju
Services Center
Sohari
Hwaseong
Gwangju
Services Center
Sohari
Hwaseong
Gwangju
Participants
5,119
10,639
5,963
3,234
1,658
5,753
245
700
300
79
186
73
40
46
75
42
40
63
116
51
training Hours
2
2
2
2
2
2
24
24
24
8
8
8
8
16
16
16
16
400
400
400
Period (Month)
1
1
1
1
1
1
Period (year)
1
1
1
1
1
1
1
1
1
1
1
1
1
1
total training Hours
122,856
255,336
143,112
77,616
39,792
138,072
5,880
16,800
7,200
632
1,488
584
320
736
1,200
672
640
25,200
46,400
20,400
904,936
27.45
industrial safety and Health education
As stated in the 69th Article of the Collective Agreement, Kia Motors and labor union share the
common interest in maintaining the high priority in the matters of employee’s industrial safety
and health. Law-related matters of Industrial Safety and Health Rules (31st Article) were set forth
by the labor union according to the decisions of the collective agreement. Rigorous specialist
training is being employed to the head of production management and persons in charge of
musculoskeletal illnesses for Industrial Safety and Health Management. In addition, returning
personnel from industrial accident are given rehabilitation training to improve health conditions.
Kia safety Academy (KsA)
Kia Motors established Kia Safety Academy (KSA) to develop general safety maintenance for any
inadequacies in the work field. KSA’s programs include legal safety, health process, and in-house
inspectors training. In 2007, 1,015 employees received 12 different trainings to facilitate duties in
the health and safety management. With this academy, Kia Motors established the safety culture
and enhanced employees’ productivity.0102
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01. Supervisor Management Safety Training
02. Cardiopulmonary Resuscitation (CPR) Training at KSA
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seCuRity MAnAGeMent AnD tRAininG
security Management system
Kia Motors is working to expand safety measures at a global level to meet the company
standards. Kia applied security procedures with standards guides, constructed security portal
systems, and raised PC management levels. In 2006, Kia Motors acquired the ISO27001
certification through an audit institution, BSI KOREA, obtaining the public’s trust for information
security management. The company is maintaining the certification twice a year through post-
inspection.
security training
Throughout the first and second half of each year, Kia operates collective training for the security
personnel for apt abilities in cases of unknown industry spies, information extrusion, company
security policies, and security management counterplan. Also for all security officers, workshops
are held twice a year. During the first Fridays of every month, the security supervisors offer
guidance training and examinations, which are required for following security management
procedures.
special security Management training
From 2005, Kia Motors’ directors and managers at headquarters undergo special security sessions
and training. The emphasis of security training is in raising security consciousness towards
preventing industrial data espionage, as well as company security countermeasures for providing
approachable methods to core security affairs. In 2008, there will be collective training for the
whole company for establishing security management values and raising security consciousness.
enforcement of Business information Management
Using International security certification (ISO27001) as a basis, evaluation in security
managements are held first and second half of the year. Security management conditions are
evaluated for any indicating issues that surface during inspection processes, and causes are
analyzed to prevent further relapses. Kia’s annual results from information management
evaluations show a steady annual improvement in security levels. Kia strives for excellence, which
is reflected in its results. Through early evaluation results, the company award departments who
achieve top security management and continually making improvements, while making careful
deliberations for less adequate departments.
security Related system
To prevent electronic document hacking, malicious codes, access in identity theft, and other data
abuses, the One Time Password system (OTP) is utilized. Also through Electronic Document and
Records Management (e-DRM) systems, documents and electronic blueprints are being encrypted
to prevent abuses. For protection and data evidence enhancement, data and output records are
preserved for future cases.
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0102
01. International Security Certification (ISO27001) Certificate
02. International Information Security Management System Ceremony
Annual Results of information Management evaluation
Classification
Content
2007
98.7
2006
98.5
2005
98.2
Goal
100 pts
Vehicle industry requires technology-intensive and capital-intensive industrial values. Completed
vehicle is like a finished 20,000 piece puzzle. Similarly for composition of one vehicle, multiple
business partners form relationships with vehicle manufacturers for vehicle production,
development, and parts. Throughout the process, all of each partner’s specialty level determines
the quality of the finished vehicle. Vehicle manufacturing company like Kia is held together by
the supply chain of its suppliers and partners who provide timely, crucial parts and technology for
flawlessly orchestrated completion of a vehicle. In this respect, Kia respects its partners by
supporting competitiveness and survival of its partners for a mutual and sustainable growth.
Business PARtneR PROGRAMs FOR ACCOMPAnieD GROWtH
support for strengthening Partners’ Competitiveness
Partnership support _ On January 2007, Kia Motors founded Partnership Support Team with
Foundation of Korea Automotive Part Industry Promotion to strengthen the company culture and
promote global competitiveness with its small-medium business partners. Every year, Partnership
Support Team works with business partners for at least three months providing technical support,
quality directors, exports and management supports as part of the partnership management.
Partnership Support Team is made up of 20 full time officers excelling in each respective
management fields, serving two year terms.
Costs from consultation periods are fully supported by Foundation of Korea Automotive Part
Industry Promotion for Kia’s business partners to heighten partners’ management abilities.
Hyundai-Kia Motors group contributed a total of 3.5 billion won to Foundation of Korea
Automotive Part Industry Promotion in 2007. Partnership Support Team goes beyond providing
quality and technical knowledge by engaging in sustainable strategies with long-term values
placed on performance. In this process, expansive technical knowledge from former executives is
handed down to al l partners. From small-medium businesses, Kia Motors received
acknowledgment for its industrial precedent in partnership model.
execution of the “5 stars” system _ Since 2002, Kia Motors initiated the “5 Stars Quality”
system for improving partners’ parts quality and strengthening its competitiveness. Kia Motors
operated the system under three criteria: no recalls in the latest year, parts supply rate of at least
“4.5 Stars” rating, and 750 points in quality management systems. Partners that achieve the “5
Stars” can register for the “5 Stars Quality Club.”
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Business partners
Reinforcement in Partners’ Core Capability • Execution of the 5 Stars System• Partnership Support• New Technology Exhibition and Seminar Opening• Guest Engineering Program
Reinforcement of Management stability • Supply Costs Settlement• Working towards a Common Goal• Funds Supports• Group Purchases
strengthening the Global Correspondence system• Joint Overseas Market Entry • Global Human Resources Program • Building Environmental Network
Reinforcement of 2nd Partners supports • SQ Mark Certification System• Management Innovation Seminar • Quality and Technology Volunteer Services • Group Purchases• Occupational Training Consortium Expansion
Direction of the Win-Win Practice
Companies awarded with “5 Stars” ratings heighten their status through credit rating
agencies with privileges of using “5 Stars” logos. From 2002 to 2008 January, a total of 15
companies were registered to the “5 Stars Quality Club.” Kia awards bids participation for new
vehicle development to those partners who score 50 points out of 100 in social responsibility
section of the “5 Stars” system. (Social responsibility standards consist of company operation’s
level of integrity, transparency, and internal HR policies.)
Partners’ employees training _ At Kia Motors, various programs are run to elevate technical
skills and operating competence of business partners’ employees. Every year, 32,000 partners’
employees train with specialists in collective and online setting. Kia also holds training session for
its partners in purchasing techniques to advance partners’ purchase systems.
tech Day Opening for Partnership R&D _ On November 2007 at the Namyang Research base
(R&D), Kia Motors held its “2nd Tech Day for Partnership R&D” for the 30 primary partners;
(Powertrain (10 companies), chassis (7 companies), assembly (8 companies), and car body (5
companies)).
For R&D and strengthening partnership efforts, Kia Motors held the “Partnership Skills Unity
Exhibition,” where Kia Motors gave partners the opportunity to present new R&D technologies.
‘R&D Partnership Seminars’ were also established to settle partners’ grievances and discuss
improvement plans. Kia Motors held the annual ‘R&D Partnership Tech Day’ events to expand the
scope of partners’ competitiveness. These events also offered an equal share of necessary skills as
well as idea exchange to build strong partnership based on open communications. Kia plans to
further expand the partnership program to encourage growth of its partners.
support for Partners’ Management stability
supply Costs settlement _ Kia Motors is furnishing ready funds to financially aid small-to-
medium businesses with inadequate raw supply expenditures. For larger companies, Kia has
reduced the pay periods from 120 to 60 days. To maintain payment systems, similar operations
will allow second and third partners to receive payments simultaneously.
Financial support _ To stabilize for business partners, Kia Motors supports raw material
purchases in addition to R&D costs. In 2007, Kia Motors funded 2.4 trillion won in supports and
plans to further expand the support scope.
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0102
01. Management Innovation Training for Partner’s Representatives
02. Hyundai-Kia Motors Partnership Convention and Seminar
(1) RFID (Radio Frequency Identification) : Through Wireless and IC chips, RFID manages information through a variety of
next-generation object-recognition technologies
PARtneR PRODuCtiOn systeM
Guest Engineering Program
Guest Engineering Program is Kia Motors’ represen-
tative partnership extension program. In order to
reduce auto part development periods and costs,
parts designers from partners and engineers from
Kia work together in vehicle development. Based
on monthly average, partnership program are oper-
ated in 43 companies with its 242 researchers at
Hyundai-Kia Motors research centers.
Establishing Logistics System (RFID) (1)
What is significant in the win-win practice with its
partners is the closely linked logistics system. In this
system, Kia Motors uses electronic tags called Radio
Frequency Identification (RIFD), which are applied
to the vehicle parts in the production process for
assembling identification. RFID emits signals that
are picked up by the computer servers. This allows
companies to use their free time to accurately
observe progress via the internet without having to
physically attend to each affair. In addition, compa-
ny trucks delivering auto parts also carry electronic
processes of trial and error, time waste, and costs;
in order to focus primarily on plant operations.
After 2006 Slovakian governmental transition,
Sewon lost all its governmental contacts and
support during the crucial market entry stage.
Mong-Koo Chung, the chairman of Kia Motors,
and Eui-Sun Chung, president of Kia Motors
directly negotiated with the Slovakia administra-
tion to smooth out our market entry without any
negative repercussions.”
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business briefings focused on cost reduction methods through power of group purchase to its
second partners. To boost second partners’ competitiveness, Kia Motors plans further
engagement with persistent emphasis on joint effort programs.
settleMent OF OPen AnD FAiR PROCuReMent systeMs
Under the principle management ethics, all of Kia Motors’ partner transactions must be open and
fair (Open & Fair policy). For moral establishment in purchase system, published guides are
provided by the supervising system of the cyber audit offices and HR Ombudsman programs.
Purchase managements undergo purchase training in computerization of purchases through
Value Advanced Automotive Trade Zone (VAATZ) programs, where purchases may be practiced in
an open and fair manner. In 2007, fair transactions examination revealed three cases of
mismanagement that later received visible legal actions and penalties. Currently, three more cases
are undergoing inspection processes. Following inspection results, Kia Motors will acknowledge
any inadequate factors pointed out and reform them for preventative measure. Further, Kia will
perform comprehensive self-examination as a preventative measures to find any potential legal
violations and correct them. Kia Motors puts forth consistent efforts with consistent training and
transparent resolution practice.
Complying with ethics Charter
Ethics Charter of the purchasing department outlines fair and transparent purchase activities as
well as central values of Kia’s partnerships with domestic and overseas partners. In general, ethics
regulations are specified in factors such as receiving money, soliciting for meals and goods, or
abusing information in business activities. Following principles of Ethics Charter, Kia’s employees
may not receive any gifts or money from business partners over 30,000 won. Also, receiving direct
and indirect compensations from business partners are considered unethical behavior.
Guidelines for employee’s ethical Behaviors
Kia Motors’ previous Code of Ethics and Ethical Charter for employees’ ethical behaviors were too
vague for employees to comprehend. To make up for equivocal standards in business activities,
Kia distributed clear guidelines concerning the employee’s ethical behavior, clarifying where
ethical regulations lie at work and daily activities.
Cyber Audit Office
The audit office of Kia Motors runs field audit and cyber audits to operate ethical management
efficiently. The cyber audit office disclosed Kia’ Ethical Charter and Code of Ethics on Kia Motors’
website. It informed business partners and customers of basic ethical management mentality in
the field and practices; facilitating businesses work ethics to be reflected on Kia employees’
behalf. Especially with the foundation of Cyber Call-in Center since April 2004, customers,
companies, employees, and anyone interested in Kia Motors are allowed access via the internet.
This allows anyone to bring consciousness of any unjust and unethical behaviors within the
company. The helpful input provides for effective reflection on issues for system improvements
and Kia’s ethical activities. As a practical and transparent system, persons that report any
unethical activities are informed of the resolving processes and results. In 2007, Kia Motors
received five reports through the internet regarding employees’ unethical behaviors. Kia
investigated and took actions against those employees according to the corporate policies,
contributing to Kia’s business improvement. Kia Motors is striving to consistently prevent relapses
of unethical behaviors through ethical training.
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Acquiring Cost Competitiveness• Promoting Partners’ Active Participation through Proposals• Corresponding Price Advancement on Materials
improving Parts Quality • Stabilizing Parts Quality in New Models• Elevating Partners’ Quality Level• Improving Parts Quality on a Global Level
transparent Purchase• Promoting Transparent Transactions• Settling Business Ethics
Reinforcing Overseas Plants’ support• Expanding Value Advanced Automotive Trade Zone (VAATZ) in Overseas Plants• Supporting Group Purchases in Five Global Divisions
Procurement Policy
Operating Ombudsman Program for Business Partners
In order to build collaborative relationships between Kia Motors and its business partners, HR
Ombudsman programs are being conducted for partners’ employees. Business partners report
their concerns, suggestions, or report any unethical behaviors of Kia Motors’ employees. With this
program, Kia pursues reciprocal development.
Cooperation on Procurement by the vAAtZ system
Kia Motors is operating VAATZ to practice transparent and effective purchase systems. Kia Motors
built the Sapturn system(1) within the VAATZ, where business decisions can be achieved by simply
viewing computerized processes, consequently negating most personal interferences. The system
strengthened the transparent transactions at a much higher level and allowed comprehension of
purchases’ scope globally. Kia also conducts on-line bids through the VAATZ system for parts
procurement processes and selecting business partners to practice fair and transparent business
activities.
establishing Fair transaction system
training employees’ Fair transaction _ Kia Motors trains employees concerning issues such
as anti-corruption policies linked to Fair Transaction Laws. In 2003, Kia Motors started online
training for all of its employees to better inform transaction laws. In its inception, 4,500
employees began the online training. Currently, Kia Motors is offering the training regularly with
promotion of new candidates and new employees. Employees in purchase and fair transactions
sector also undergo specialized training processes. In procurement and sales departments, duty
training is operated at least twice a year (at least 2 hours per training) with external lecturers in
order to set solid foundation for corruption prevention.
voluntary Compliance Program for Fair transaction _ Kia Motors operates a Voluntary
Compliance Program for Fair Transaction to enhance transparent businesses culture and prevent
transaction violations. The program was established in 2002 November. In addition, Kia Motors
established a council for the voluntary fair transactions compliance. Managers appointed by the
Board report employees’ compliance results biquarterly to the Board. Kia Motors offers
employees various training programs for fair business transactions both online and offline. The
Voluntary Compliance Program contributes to reducing losses resulting in violation of fair
transactions.
01
96
01. The Purchasing Process Computerized by VAATZ System
(1) Sapturn System: Electronic bid system
Anti-corruption training Program
Legal Processes of Fair Transactions for all Employees (in cyber training)
Training content: understanding fair transactions legal processes, blocking
unlawful transaction processes
Training date / hours: 20 hours
2007 trainees: 108 members (new members)
transparent Purchase training
Training content: Transparent purchase training and procurement ethics
compliance
Training date / hours: January 26 and March 5, 2007 / 1 hour
Trainees: total 47 members (41 promotion candidates in purchase
headquarters / 6 of new employees)
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Although a vehicle is a private possession, it is also a social possession. Vehicles, which allow
comfort and reliability, influence not only individuals but society as well. Automotive
manufacturing company is responsible for creating vehicles with maximum comfort and
reliability, while raising the quality of life through the motor lifestyle culture. Kia Motors
understands that with each vehicle comes a responsibility for customer’s life, thus Kia develop
safety features. Kia is making great strides to continually improve customer service.
In 2007, Kia Motors earned high scores in domestic and overseas safety evaluations, taking a
step further in materialization of customer safety. According to the outside research and
evaluation services, Kia Motors achieved first place in Korean Service Quality Index for four
consecutive years, in addition to first place for quality in Call Center Services Index. Kia also strives
to raise the customers’ lifestyle through various cultural and sports events.
CustOMeRs sAFety: veHiCle sAFety
One vital function of vehicles is ensuring safety of the driver, passenger, and pedestrian, because
accidents involving vehicles can be fatal. Kia Motors makes considerable efforts to design a safe
vehicle for its customers. This effort is made through Advanced Safety Vehicles (ASV) and
application of safety systems. Additionally, voluntary recall initiatives are set in place to respond
immediately in case any defect surfaces that may pose threat to the customer’s safety. Kia Motors
runs traffic safety campaigns for its customer and training sessions for accident prevention and
guarantee customer safety.
custoMers
Advanced safety vehicle
01
11
21
02
02
12
12 12
1212
22
03
13
23 23
04
14
24
05
05
05
15
2506
16
26 07
17
27
08
1828
09
19
1020
Advanced safety vehicle (Asv)
To provide more than a general safety offered by safety belts and air bags, Kia Motors is
developing intelligent active safety system, Advanced Safety Vehicles (ASV), which will further
enhance safety and reduce the impact of vehicle collision. ASV perceives driving condition on the
road and the driver to readily and actively prevent accidents, reduce collision damage, confirm
collision safety, and minimize damage magnifications. ASV will be connected to the Intelligent
Transport System (ITS), which will bring the same safety features from the ASV to the roadways.
98
(1) ITS: Intelligent Transport System (ITS) is next generational advanced traffic system to efficiently manage traffic confusions
and safety using telecommunications/electronic technology.
1. Road condition sensor
2. Magnetic sensor
3. Vehicle distance sensor
4. Forward obstacle sensor
5. Blind spot monitoring camera
6. Drive recorder
7. Side obstacle sensor
8. Air pressure sensor
9. Inside door lock/unlock
10. Rear obstacle sensor
11. GPS sensor
12. Airbag
13. Road-to-Vehicle / Vehicle-to-
Vehicle communication system
14. Rear view camera
15. Water repelling wind shield
16. Seatbelt pretensioner
17. Driver monitoring sensor
18. Headup display
19. Steering angle sensor
20. Electronic control throttle
21. Electronic control brake
22. Fire detection sensor
23. Vehicle speed, acceleration
sensor
24. Collision detection sensor
25. Pedestrian collision injury
reduction structure
26. Electronic control steering
27. Message display system
28. Hands-free system
seCuRinG DRivinG PeRFORMAnCe
sensOR siGnAls inseCuRe nAviGAtiOn COntROl
• Car wheel speed
• Deceleration
• YAW Moment
• Steering Wheel Rotation
• Pedal Response Speed
• Under Steer Correction
• Over Steer Correction
• Overturn Danger
• Emergency Brake Function
• Dynamic Brake Control (DBC)
• Hill-start Assist Control (HAC)
Rest time awaiting signal
Active ControlvDC
sAFety teCHnOlOGy in MOHAve MODel
vehicle Dynamic Control (vDC)
VDC provides additional eyes and hands to the driver as it assists in detecting potential hazards on the roadway and providing driving
support. VDC uses built-in sensors to detect the driver’s control and its road conditions for any potential dangers (Sideslip and Under/Over
steer), and then it independently controls a break system in each tire and engine output to avoid accidents.
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As a first stage of development, Kia Motors will focus on vehicle control, information
communications, and core systems technology.
Collision safety
vehicle Collision Analysis _ Kia Motors uses computerized Vehicle Collision Analysis to assess
safety performance of the vehicle from the designing stages for improving customer safety. Kia
Motors conducts collision analysis for passenger behaviors as well as safety for women and
children. For complete analysis of the vehicle and its passengers, multiple vehicle collision
simulations, and actual vehicle tests are taken. With computerized applications, various Vehicle
Collision Analyses are being widely applied for passengers’ protection.
Actual vehicle Collision tests _ In orders to fully maximize collision safety, numerous tests are
run under severe conditions with numerous road circumstances. These diverse multi-tests range
from front, side, back, offset crashes to car-to-car and car-to-pole crashes. With evaluation from
these tests, Kia increases chances of passenger survival and efficiency of protection systems. Kia
Motors consistently tests under various circumstances to satisfy global standards by conducting
tests utilized by various safety-related institutions.
safety Acknowledgements
Kia Motors is acknowledged nationwide for producing the safest vehicles. Kia Motors’ top safety
grading was determined through the national safety tests.
Korea _ Vehicle safety evaluation is operated through New Car Assessment Program (NCAP).
2004 Cerato as a 1500cc compact car (driver seat ★5, passenger seat ★4, sides ★4), and 2005
Sportage as a medium-sized leisure vehicle (driver seat ★5, passenger ★4, sides ★5) received the
highest evaluations in vehicle safety. Especially in 2007, Lotze as a 2000cc compact car acquired
five stars on all safety tests (driver seat ★5, passenger ★5, sides ★5) and established itself as one of
the nation’s safest vehicles.
Oversees _ In 2007 global market, cee’d received the highest safety rating of five stars in
European New Car Assessment Program. In New Car Assessment Program (NCAP) of National
Highway Traffic Safety Administration (NHTSA), Lotze (Optima), Sportage, Sorento, and Grand
Carnival (Sedona) received a five star rating in front and side impact tests, thus receiving
acknowledgement as safest vehicles. In NCAP of Insurance Institute of Highway Safety (IIHS),
Grand Carnival (Sedona) was also acknowledged as ‘Top Safety Pick’ on all front, sides, rear, and
collision impact test.
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0102
01. Front Impact Test
02. Airbag Expansion
Korea and America safety Collision evaluation
Model
Cerato
Lotze
Carens (Rondo)
Sportage
Sorento
Grand Carnival (Sedona)
(*) Kia Motors’ actual test results
Domestic nHtsA
Front
5★/ 4★
5★/ 5★
5★/ 4★ (*)
5★/ 4★
5★/ 5★(*)
5★/ 4★(*)
Side
4★
5★
5★(*)
5★
5★(*)
5★(*)
Front
5★/5★
5★/5★
5★/5★
5★/5★
5★/5★
5★/5★
Side
4★/4★
5★/5★
5★/4★
5★/5★
5★/5★
5★/5★
CustOMeR sAtisFACtiOn
For Customer’s Comfortable and Pleasant Experience Customer satisfaction is an essential value of
Kia Motors for sustaining its business and achieving its long-term goals. In customers’
relationships, Kia Motors fosters lasting impressions by contributing to customer values. In 2007,
Kia Motors aggressively addressed customer complaints and promoted proactive services for
Global Community engagement• Global Relief Activities- Focus• Foreign Workers Support
Representative Company of Affiliates• Social Welfare • Young Generation Support • Human Resources • Environmental Preservation • Local Community Development
volunteer Group• Group Social Engagement • Social Engagement Campaign• Volunteers of Affiliated Companies
+
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coMMunity
Social Engagement
System
Traffic Convenience for
People with Disability
(Easy Move)
Global Community Engagement
Representative Businesses of Affiliates
Promoting Traffic Safety (Safe Move)
volunteer Group
Kia Motors made an establishment to sustain communities and allow harmonious
communications. At our domestic and overseas facilities, our former establishment was removed
for the construction of new facilities. Through mutual communications with local communities,
Kia is meticulously examining various regional and societal influences as well as establishing
security alarm systems. From a viewpoint of government relations regarding automotive
manufacturing industries, there must be a thorough inspection of the department prior to
community policy establishment and amendments. Kia Motors is establishing policy-making
through partnership amongst similar industries.
sOCiAl enGAGeMent PHilOsOPHy AnD systeM
After introducing our management philosophy slogan, “We usher human happiness through our
vehicles” and 2005’s social slogan, “Moving together with the World,” Kia set new boundaries as,
“a company leading in vehicle culture through eco-friendly economic activities and active social
responsibility, in pursuit of human happiness and a sustainable society.”
Philosophy: The pursuit of human happiness through vehicles
Dissemination (2007-2008) Building global community care system
lead (2009-2010) Taking lead of Spreading community care models through society
social engagement Organization Chart
President of Hyundai Motors
Hyundai Motors
Officer of Hyundai Motors' Social Engagement
Hyundai Motors Social Engagement Council
(Coordinator of each region)
President of Kia Motors
Kia Motors
Officer of Kia Motors’ Social Engagement
Kia Motors Social Engagement Council
(Coordinator of each region)
President of affiliated companies
Social Engagement Council of affiliated
companies
Officer of Kia Motors’ Social Engagement
Management Support System of affiliated
companies
top managementGroup Council for Social Engagement
(The director of a bureau: Leader of Social
Culture Team)
Leader of Social Engagement Group
Head of Planning and Coordination Office
eAsy MOve CAMPAiGn
Looking to people less fortunate than us is to understand those we share lives with, imparting us
in our care for a sustainable world. As seniors or disabled people need medical equipments for
support, general vehicles are required to special implementation applied to vehicles. Republic of
Korea falls under UN standards of the aging society (advanced age population is 7%). Looking at
current increasing trends, the aged society (14%) would be come in the year 2020 and the post-
aged society (above 20%). With the trends, Kia Motors continues the persisting development of
Easy Move vehicles to facilitate transportation processes for disabled and disadvantaged drivers.
In September of 2006, Kia Motors introduced various extensions of vehicle properties in Easy
Move models such as the Lotze and Carnival’s rear wheelchair slope, steering wheel lifter seat,
and wheelchair crane. Kia is undergoing various processes of R&D for adding extensions to more
model varieties.
To furnish transportation for disabled and disadvantaged people in a manner of establishing
societal sympathy, Kia Motors actively runs Easy Move campaigns. Kia’s special concerns of traffic
life for the disabled and disadvantaged were characterized by various support programs.
Disability Support Service programs provide various aids such as brails support and prosthetic
limbs. Promoting locomotory activities for people with disabilities is one of Kia’s central goals for
community engagement. Kia Motors will expand the range of locomotive support programs for
disabled and disadvantaged persons, through continual R&D and cooperative aid from related
organizations.
sAFe MOve CAMPAiGn
Majority of traffic accidents come from security mishaps that can be prevented simply by a
heightened surrounding awareness by drivers and pedestrians. As a vehicle production and sales
company, Kia Motors leverages responsible conscientiousness in actual traffic affairs with,
“Prevention Training, Field Prevention, and Service Support” programs to promote Traffic safety
culture.
Especially for advanced communities concerning children’s safety and growth, government
and associated organizations are establishing and promoting safety school zones (children’s safe
district) through campaigns. According to 2007 National Police Agency publications, consistent
school zone campaigns aided in the decrease of children’s death from traffic accidents by 57 % in
the last five years, precisely 468 children’s deaths in 2002 to 202 deaths in 2007. However, the
number of deaths still places a high rank for OECD members. Kia Motors plans further anti-traffic
accident campaigns to eliminate traffic disasters of children; also as post-support to traffic
accident victims.
0102
106
status of easy Move Activities
• Korean Differently Abled Federation , Community Chest of Korea: Reinforcement of accessibility to facilities
(Automatic door installation, slope supplement, handrail installation, and expansion of exit doors’ operating radius)
• Community Chest of Korea, Federation of Korean Industries: construction of integrated exercise facilities for
the disabled
• Community Chest of Korea: Prosthetic limbs support (176 amputees and physically disabled persons with lower
brackets of income)
• Community Chest of Korea, 4 regional integrated welfare centers: Specialty playroom establishment called,
“Kids’ Floor” for children with disabilities
01. Lotze Easy Move Model
02. Operating “School Zone Keeper Campaign” as Part of Safe Move Campaigns
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CommunitySpecial Story: Communicating with Stakeholders
eMPlOyees vOlunteeRs ACtivities
Kia Motors’ employees are putting forth efforts to better a society that is shared, through active
contributions to neglected neighborhoods; conforming to Kia Motors’ purpose through
participation and lively support. With Hyundai-Kia Motors Group composed of volunteer
employees, blood drive campaigns are held each year alongside social engagement campaigns at
the year’s end. In November 2005, specialized disasters relief corpsman and community volunteers
unified to restore its community of flood damaged regions.
In addition, Kia Motors has engaged in community activities, running community activity
campaigns from participation of employees’ families since 2007. For each affiliated company,
volunteer activities are being held not as a one-time event, but as a continual event through
coagulation of 362 volunteer sectors from 18 companies. Monthly or by a cycle of every other
week, the volunteers are forming connections with its community welfare facilities. The
companies are systematically unfolding various activities such as social welfare, the next
generation support, human resources, environmental conservation, and regional community
developments.
investMent OF inFRAstRuCtuRe FOR PuBliC BeneFit
Kia Motors considers livelihood of domestic and overseas community members while constructing
infrastructures. As a link to Kia’s Easy Move Campaign, sports centers have been erected for the
disabled and regional residents within the vicinity of its production plants. For overseas
community engagement, Kia Motors constructed educational facilities for lower class members in
India with social welfare organizations.
sports Center Operation
Hwaseong and Sohari plant Sports Centers opened integrated cultural spaces for all Kia Motor’s
employees, their families, and regional residents; alongside Shuttle bus operations for
comfortable access. Kia Motors operates programs for every center for quality livelihood of
regional residents and promoting sports culture. Also, Gwangju plants have allowed residents
access to swimming facilities, and headquarter in Seoul has opened health centers and swimming
facilities with Art Leum’s art exhibition space for residents.
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0102
01. Nationwide Tour of Traffic Safety Schools for Children
02. Employees' Blood Donation Campaign
Keeping a safety school Zone Campaign
OperationYearSince: 2005 ~ Current
Activities:For preventing traffic accidents in School Zones (children protection zones), kick off campaigns taking
circular checks of school zones near business districts, establishing safe environments for children
PartnersOrganization:National Safety Association
safe Move Activities
Activities Details
Children’sTrafficSafetyCampaign • Safe Traffic Musical, “No No Story”
• Traffic Safety Content Disclosure
• National Tour Children’s Traffic Safety Education
• Broadcast Campaign
• Traffic Safety Mini Exposition
• Traffic Safety Classes for Employees
3CloverHunt • Fulfilling Wishes for a Child Victim in a Traffic Accident
Reinforcement of Accessibility to Facilities for the Disabled
Hyundai-Kia Motors Group contributed 5 hundred million won alongside Community Chest of
Korea and Korea Differently Abled Federation (KODAF) for 84 organizations established
nationwide for the people with disabilities. The contribution supported an arrangement of
impact absorption floors with elasticity and slippery prevention floors. Before the arrangement,
many people with disabilities were limited to exercise due to general equipments; however
enhanced facilities have allowed easy access for health maintenance and remedial exercises.
indoor Playgrounds support for Children with Disabilities
Hyundai-Kia Motors Group offered 500 million won with Community Chest of Korea and 4
regional welfare centers in contributions to support children’s specialized play rooms “Kids’
Floor”. The meaning of “Kids’ Floor” conveys children’s space that is provided for running around
playfully while being safety conscious (Floor space). Through specialized educators, obesity
prevention clinic, family education, and various educational programs have been established for
children with disabilities. Kia’s efforts aid children with disabilities to gain independence and
eventually lead confident and healthy lives in their own communities.
educational Facilities support for india lower Class
At northern part of India, in Dhaneshari region where there are untouchable villages, Hyundai-
Kia Motors Group constructed dormitories as extensions of an old building at the Sujata Academy
Facilities, which is an educational institute for neglected regions. Amidst the India’s identity caste
system, the class occupies 15% of India’s population. People who belong to that class face severe
discrimination their whole lives. Currently, Indian government prohibits discrimination, however
the society’s immensely potent caste system remains unavoidable; the outcast live amongst social
discrimination and complete poverty. Currently Hyundai-Kia Motors Group actively pursues
contributions for the social dream of the alienated class. Together with Community Chest of
Korea and Korea Join Together Society (JTS), 200 million won were contributed in the last two
years, in support of constructing a four-compartment, three-story high boarding house extending
off of an old building, measuring 1,785; Kia also supports the 1,000 people’s uniforms, bags, and
shoes in its donations.
sOCiAl enGAGeMent By issues
social Welfare and environmental Conservation
Every year, Kia seeks to contribute with various activities to neglected neighbors. In 2007, Kia
Motors kicked off three campaigns with Ministry of Information and Communication, and mobile
communication companies; the Give Phone Campaign, Lotze soccer tournament and lunch money
campaign for fund raising. To raise environmental concerns and promote clearing and
maintaining the environment, Kia Motors’ employees actively participated in “Love Green
Mountain” campaign for mountain climbers that pursue nationally famous landscapes. The Lotze
“King of fuel efficiency” contest for corporate taxi was held to promote energy saving as well as
to have a just traffic culture; In addition, Kia Motors held the Sorento national environmental
explorations for swamps at the demilitarized zones.
Growing Generation support
Every year, Kia Motors offers chances for the youth who do not lose hold of their dreams amidst
their difficult environment in order to give hope and a self-challenging mentality. The
0102
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01. Disabled Children's Playground "Kid's Floor" Establishment Support
02. Offering Donation for Compassion Korea
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Business Partners
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CommunitySpecial Story: Communicating with Stakeholders
opportunity is given to the Lotze Youth expeditionary team for teenagers and college students
dreaming of being next generation leaders. With such efforts, Kia supports potential global
leaders, raising quality of the youth through global work camps.
During May in 2007, Kia Motors contributed Compassion Korea for releasing children from
poverty with 30 million won. Out of poverty stricken countries for which Compassion Korea will
promote, one child is connected for monthly support of 35,000 won until the child finishes high
school education. To strengthen the release campaign, “having one child”, 66 Kia’s employees
joined the campaign and connected to 72 children.
Cultural Aspect
On March 2007, Hyundai-Kia Motors group opened “Yangjae Art Leum” art exhibitions space at
Yangjae-dong headquarters with work of various themes. To celebrate the space, famous
contemporary artists, Chang-Yul Kim, Sung-Tae Park, Yong-Duk Lee were first given private
viewing; operating two to three month periods of planning new exhibitions.
109
0102
01. Local Citizens' Ordinary Access of Art Exhibitions Space "Yangjae Art Leum"
02. Operating the "Future Car Technology Exhibitions" for College Students to Display Their Ideas
A letteR FROM inDOnesiA
To.Hyung-BaeYoon
Hello, how are you? I am doing quite well. I am
the eldest daughter of my family and am currently
living with my grandfather, grandmother, mother,
father, and younger sister. I wanted to thank you
for being my sponsor. Every Sunday I diligently
attend a nearby church and I am grateful for your
help. I will pray that all things will go well with you
and your family I will stay a good kid as well. Again
thank you.
Oza from Indonesia
Oza is an eight year old girl whom I met through
Compassions activities. I wanted to make provide
a sister to seven month boy, however upon seeing
Oza’s hanging picture from Love’s Fruit, and espe-
cially her large round eyes, I decided I had to im-
mediately take support of this child. As I received a
short, but a thoughtful letter, I once again thought
to myself what I could do to help this child. I am
thankful that such a small help could be of great
hope, but I should too hurry with my reply letter.
Domestic Communications Team: Manager Hyung-
Bae Yoon
ACADeMiC-inDustRiAl COOPeRAtiOn PROGRAM FOR HuMAn ResOuRCes
To expand on the development of human resources
and educational opportunities for students, Kia
Motors has joined with colleges for Academic-
industrial cooperation alongside technology
teaching supports and specialist seminars. Since
1985, Kia has financially supported teachers who
taught 4,200 students newest skills in technology.
Every year, Kia Motors offers 200 test vehicles and
engines to education organizations nation-wide
for testing transmissions and materials for train-
ing. From 2001, the annual “College Cooperative
System Technology Competition” gives opportunity
and the disclosure for students to test theories into
literal application practices.
FutuRe AutOMOtive teCHnOlOGy COMPetitiOn
In 1996, the Future Automotive Technology com-
petition was opened to domestic college students
to reveal their creativity and a chance of exhibiting
execution of their ideas. In 2007, Kia created a new
approach for preexisting real productions, expand-
ing the scope for participants, allowing ideas to
be executed in the medium video or simulation.
Throughout the competition, Kia motors supported
20 work productions, alongside an announcements
ceremony awarding scholarships of 100 million
won.
GlOBAl COMMunity enGAGeMent
Kia Motors is expanding marketing and production networking worldwide. Kia Motors is taking
Social contribution activities, raising community caring standards to a global level from Europe,
Central and South America, Canada, Australia, New Zealand, Asia and Middle East regions. Kia
Motors and overseas natives are together reaching materialization for particular necessities of the
communities.
europe
With focus on sales subsidiaries, Kia Motors is making efforts to contributing globally to
numerous regional communities in Germany, London, Slovakia, Czech, Austria, Hungary, and
central Europe. In Germany, 7 euros from each vehicle sales are endowed as contributions to
regional communities. Kia Motors continues its support in UNICEF and child cancer research
centers, solar energy developments, and International Fund for Animal Welfare (IFAW). Kia is also
supporting children for safe ways to school, in London, through sponsorship and vehicle design
competitions; alongside vehicle sales support for workers struggling financially and endowments
support women’s cancer research centers. In middle regions of Europe, Kia Motors is operating
various cultural activities, with participations in environmental improvement programs to support
lower class members of society.
Central and south America, and Canada
Kia Motors continues to expand societal contributions activities in the Central and South
American regions in nations of Chile, Atlanta, Panama, Peru, El Salvador, Paraguay, Ecuador,
Columbia, Nicaragua, and Haiti. In the poverty stricken nations’ poor working class, Kia is focusing
on activities with UNICEF, Red Cross and international organizations to develop and expand
support programs for the poor. In Canada, Kia’s vehicles are contributed for use in training for
technical schools in its communities other than donating funds for child patients’ care.
Australia and new Zealand
In Australia, Kia Motors focuses on expanding traffic safety culture with programs for younger
drivers’ safe driving and fundamental training. With drivers’ license requirement age of 15 years,
teenagers’ reckless driving still continues to be a dominant social issue in New Zealand. Kia’s
training programs focus on operating safety training and driving school supports for teenage
drivers.
Asia and Middle east
With a sharp increase in vehicle accidents in Malaysia, regional community’s issues of safety traffic
culture are prevailing. Concerning this, Kia Motors is kicking off campaigns for traffic safety. Kia is
also offering support scholarships for children who are unable to get any education due to
economic crises in most regions of Philippines and Vietnam. Kia Motors is also supporting
residents in poverty stricken Middle East regions.
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01. Central and South America Regions' Car Seat Support for Infants
02. Safe Drive Training Aimed at Young Drivers In Australia
0102
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GlOBAl BlOG (KiA-BuZZ)
Kia-BUZZ opened in September 2007, to bring awareness to Kia Motors of and to expand
communications with overseas stakeholders. For domestic companies, this is the latest approach
to global networking. “‘Kia-BUZZ (www.kia-buzz.com)” is a communications base that surpasses
national communication boundaries for stakeholders worldwide.
‘Kia-BUZZ’ consists of eight categories of Business, Communications, Design, FYI, Kia Vehicles,
Motor Shows & Events, R&D, and Social Responsibility. During the first four months in opening,
international users from 123 nations accessed 7,101(28,403 total page views) times on monthly
average, with approximately 240 new subscribers. By end of December of 2007, there were 250
registered suggestion comments. Aside from direct registration of the website, various tracers
such as track pack/link/citation are popularizing, allowing facilitated methods to collecting
suggestions from stakeholders. President Eui-Sun Chung, Vice President Peter Schreyer,
management, as well as its employees are participating in posting to reveal new vehicle design
and teaser images. The posts include publicizing skill abilities, corresponding to false information
or reports, and introducing marketing strategies are conveniently categorized, effectively
expanding direct communications with stakeholders.
DisClOsuRe On HOMePAGe FOR enviROnMentAl inFORMAtiOn
In order to have fluid communications with stakeholders and reliance of transparent
information, Kia Motors’ website will disclosed environmental information on June 2008. Kia
Motors will adhere to Resources Circulation Law that requires the disclosure of information
regarding re-evaluation of hazardous materials and recycling-related information. Kia is also
consistently improving environmental assessment results for new vehicles. The results will be
shared with Kia’s stakeholders for active environmental communications.
enviROnMentAl iMPACt OveRvieW
OveRvieW OF tHe DisCHARGeD POllutAnts
111
coMMunicating with stakeholDers
special story
Category
Existing Models
Mohave
Results
Global Warming
(ton CO2eq.)
54.5
53.2
2.4%<
Photochemical
Smog
(kgetheneeq.)
52.1
51.6
0.9%<
Acidification
(kg SO2eq.)
135.9
131.8
3.1%<
Resources Drain
(year -1)
409.2
401.9
1.8%<
Eutrophication
(kg PO4 3-eq.)
17.8
17.0
5.1%<
Environmental Impact
* From the assessment of environmental impact, pollutants reduced at 1-5% / hazardous material reduction ratio:
90% of total environmental impact generated from the process of use / High Fuel Efficiency (3.7% >) in process of
use and gas emission reduction resulted in pollutant reduction.
* Due to the increase of total vehicle weight (BL: 2009kg > Mohave: 2152kg) and use of light weight materials
(Al and Cu), discharged pollutants was increased on producing and repairing phases.
Category
Existing Models
Mohave
Results
CO2
50,400
49,200
2.4%<
nOx
124
118
4.8%<
SOx
64.4
60.7
5.8%<
PM
36.2
32.7
9.6%<
Discharged Pollutants(kg)
enviROnMentAl inFORMAtiOn On HOMePAGe
the Resources Circulating lawToxic Chemicals ContentRecycling Information
supplementary environmental informationEco-Friendly Level of ProductsLCA ResultsFuel Rate (Volume of CO2 Emissions)Gas EmissionsNoise, etc.
+
01
01. Kia-Buzz Blog Screen
112
tO tHe MAnAGeMent OF KiA MOtORs sustAinABility RePORt 2008:
The Institute for Industrial Policy Studies1 (The Auditor) was engaged by Kia Motors to review information specified in its 2008
Sustainability Management Report (The Report) to provide independent third-party assurance on its contents. Kia Motors is responsible
for the collection and presentation of all information within The Report as well as the maintenance of the underlying data collection
system and internal controls. The key objective of our review is to provide independent assurance that all statements and data cited in
The Report are free of material misstatement or bias and that the data collection systems used are robust. On the basis of the above,
The Auditor presents the following third-party statement of assurance.
COntext AnD sCOPe
In its 2008 Sustainability Management Report, Kia Motors describes efforts and progress made toward sustainability management as
well as its plans for the future. The Auditor’s review examined the following.
• Reasonable assurance on whether: the financial data specified under “Economic Value” is properly derived from
Kia Motors’ audited Annual Reports for 2007
• Limited assurance on whether: the data specified under “Intro”, “Environmental Value”, “Social Value”,
and “Outro” of The Report are stated adequately and in full and are free of material misstatement or bias.
* Reasonable assurance constitutes a higher level of assurance than limited.
inDePenDenCe
The Auditor was not involved in the preparation of any part of The Report, and with the exception of this work has no other affiliation
with Kia Motors that might compromise our independence or autonomy or place The Auditor under Kia Motors’ influence, therefore
ruling out any possible conflicts of interest. The Auditor has no relationship with Kia Motors regarding any of its for-profit operations
and activities.
CRiteRiA
(1) The AA1000 Assurance Standard’s (AA1000 AS)* three core principles of Materiality, Completeness and Responsiveness; and
(2) The Global Reporting Initiative’s (GRI) G3 Sustainability Reporting Guidelines Version 3.0**.
(3) The BEST Guidelines (BEST Sustainability Reporting Guidelines)** for sustainability management.* AA1000 AS is an assurance standard for social and sustainable reporting developed by the U.K.-based Institute of Social and Ethical AccountAbility in November
1999. A nonprofit organization that promotes corporate social responsibility, business ethics and responsible business practices, AccountAbility aims to improve
the quality of social and ethical accounting, auditing and reporting through the AA1000 AS.
** The Global Reporting Initiative (GRI)’s Sustainability Reporting Guideline was jointly convened by the Coalition for Environmentally Responsible Economies
(CERES) and UNEP in 1997. The newly revised G3 version was launched in October 2006.
*** The BEST Guideline (BEST Sustainability Reporting Guideline) was jointly developed by the Ministry of Knowledge Economy(MKE), the Korea Chamber of
Commerce and Industry (KCCI), and the Institute for Industrial Policy Studies (IPS) and provides for five levels of reporting rigor (Level 1 ~ 5).
WORK unDeRtAKen AnD sCOPe
The Auditor reviewed the Materiality, Completeness, and Responsiveness of The Report through the process outlined below:
• a review of media reports relating to Kia Motors
• a review of information contained in The Report as well as the underlying data collection system
(validation of internal sustainability-related organizations, systems, and activities)
• data sampling and assessment of high-risk areas to support intensive review of key statements in The Report, internal policies,
documentation, and information system
• interviews with managers and staff in charge of sustainability management and reporting, as well as persons responsible for
The Report’s source information
• on-site workplace reviews
(1) The Institute for Industrial Policy Studies (IPS)
Established in 1993, the Institute for Industrial Policy Studies has accumulated broad expertise in the area of sustainability
management since 2002. “The Auditor” is composed of six individuals (Dong-Sung Cho, Seok-Young Lee, Sung-Pil Park,
Keun-tae Han, Hee-Jung Kim, Ji-yeon Ahn) - professors at Korea’s top universities or expert practitioners with professional
accreditation and extensive experience in sustainability management based on majors in business management, accounting,
environmental science etc.
thirD party's assurance
stateMent
113
COnClusiOns
On the basis of the above we provide the following conclusions. The Auditor did not find The Report to contain any material
misstatements or bias. All material findings of The Auditor are included herein, and detailed review findings and follow-up
recommendations have been submitted to the management of Kia Motors.
MAteRiAlity: Does the Report cover economic, social and environmental issues
of the greatest importance to Kia Motors?
The Auditor does not believe that Kia Motors has omitted or excluded any information of the greatest importance to itself. We were
able to verify efforts by Kia Motors to identify issues of the greatest material interest to its stakeholders through Materiality Testing (i.e.
examining internal rules, laws and regulations, international guidelines, stakeholder involvement, same-industry benchmarking, media
reports, etc.) to give priority to reporting issues of the greatest risk or importance. The Auditor recommends that Kia Motors continues
to further refine its Materiality Testing model to best identify issues of the greatest stakeholder importance.
COMPleteness: How reliable is the information and data stated in the Report, and is the underlying information and
data collection system complete and robust?
The Auditor took note that Kia Motors has been gauging and managing environmentally relevant issues through a company-wide
organization and underlying system for environmental management. Moreover, we confirmed that Kia Motors has adopted diverse
management systems such as i-ESH (integrated system for safety, health, and environment), and VOC (Voice of the Customer) designed
to analyze customer satisfaction regarding its products and services. However, The Auditor recommends introducing a permanent
organization to be in charge of sustainability management while spreading out its existing systems and organization throughout the
entire enterprise and improving upon its performance measurement and evaluation system for sustainability management.
ResPOnsiveness: How well does the Report address information of importance to
Kia Motors’ stakeholders?
The Auditor determined that Kia Motors has established stakeholder-specific channels of communication including management and
staff surveys and sustainability expert interviews to listen to issues and comments from stakeholders. We also found The Report to be
improved from the previous year in terms of the structure of contents and design thanks to incorporating findings from its 2007 Reader
Comment Survey. The Auditor suggests collecting stakeholder comments from more diverse communication channels to reflect into
future reports.
Relative to BEST Guidelines, in view of the level of reporting rigor and intensity of information provided, The Auditor finds The Report
to fulfill 83.8% of the reporting requirements necessary to qualify for a Level 4 Report (from among Level 1 ~ 5).
issues FOR FutuRe COnsiDeRAtiOn
For future publications, in the interest of continued qualitative improvements in sustainability management performance and
reporting, the Auditor recommends the following.
• Present targets for major issues in each dimension and indicate the percentage of actual performance achieved against targets
to better demonstrate Kia Motors’ commitment to keeping its promise to stakeholders.
• Refine the implementation mechanism for sustainability management to be more systematic to expand the scope of stakeholders
against whom sustainability management performance is aggregated and measured to better enhance data collection and
reporting for social and environmental sustainability performance.
• Enhance the Completeness of The Report by incorporating findings from its stakeholder communication channels into
Materiality Testing and disclosing the above.
Based upon the above review and recommendations, The Auditor suggests that Kia Motors establish a more systematic program of
sustainability management and reporting, and continue to follow up with ongoing improvements going forward.
March 7, 2008
yoon-Chul leePresident, The Institute for Industrial Policy Studies
114
gri(g3) /Best inDeX
Strategy and analysis
Organizational profile
Report parameters
Governance, commitments and engagement
PROFile
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4.17
Statement from the Board of Management
Impacts of operational activity, key risks and opportunities
Name of the organization
Primary brands, products, and services
Operational structure of the organization
Location of organization’s headquarters
Countries where the organization operates
Ownership structure and legal
Markets served
Scale of the organization profile
Significant changes regarding size, structure, or ownership
Awards
Reporting period
Date of most recent previous report
Reporting cycle
Contact persons for questions regarding the report
Process for defining report content
Boundary of the report
Limitations on the scope or boundary of the report
Basis for reporting on joint ventures
Data measurement techniques and bases of calculations
Restatements of information
Changes from previous reporting periods in the scope, boundary, or measurement methods
GRI Content Index
External assurance for the report
Governance structure of the organization
Independence of the Chairman of the Supervisory Board
Number of independent members in the highest governance body
Co-determination right of employees and shareholders
Linkage between executive compensation and achievement of sustainability goals
Process in place to avoid conflicts of interest
Qualifications and expertise of the highest governance body regarding economic,
environmental, and social topic
Values, mission statements, principles, and codes of conduct of the organization relevant to
sustainability
Oversight of the sustainability performance and relevant risks by the Board of Management
Assessment of the performance of the Board of Management regarding sustainability
Precautionary approach
Support for external economic, environmental, and social activities
Memberships in associations and representation of interests
Stakeholder groups engaged by the organization
Basis for identification and selection of stakeholders
Approaches to stakeholder engagement
Key stakeholder topics
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◐
●
○
○
○
●
●
●
◐
●
●
4~5
7
12
12, 30
3
12~13
13
23
13
12
25-26
48, 78
3
3
3
3
6~7
3
3
2
3
3
114-116
112-113
20-21
21
20-21
21
20
20
20-21
16-18
-
-
-
56, 59, 68
21
6
6
6
7
NUMBER INDICATOR BESTREMARK PAGE
Economic
Performance
Market Presence
Indirect conomic Impacts
eCOnOMiC
EC1
EC2
EC3
EC4
EC5
EC6
EC7
EC8
EC9
Direct economic value generated
Financial implications due to climate change
Organization’s defined benefit plan obligations
Significant financial assistance received from government
Range of ratios of standard entry level compared to local minimum wage
Policy, practices and proportion of locally based suppliers
Procedures for local hiring
Impact of infrastructure investments and services
Indirect economic impacts
EC1
EC2
EC3
EC5
EM4
EC4
EC4
EC6
EC7
●
◐
●
○
◐
●
◐
●
●
32
74
87
-
87
94
79,82
107-109
27, 106-110
●
◐
○
◇
Fully Reported
Partially Reported
Not Reported
Not Applicable
115
Materials
Energy
Water
Biodiversity
Emissions, Effluents, and Waste
Products and Services
Compliance
Transport
Overall
enviROnMent
EN1
EN2
EN3
EN4
EN5
EN6
EN7
EN8
EN9
EN10
EN11
EN12
EN13
EN14
EN15
EN16
EN17
EN18
EN19
EN20
EN21
EN22
EN23
EN24
EN25
EN26
EN27
EN28
EN29
EN30
Materials used by weight or volume
Percentage of used materials that are recycled materials
Direct energy consumption
Indirect energy consumption
Energy savings
Energy-efficient products and services
Reduction of indirect energy consumption
Total water withdrawal
Water sources affected by withdrawal of water
Percentage of water recycled and reused
Production plants in protected areas
Significant impacts upon biodiversity in protected areas
Habitats protected and restored
Strategies for managing impacts on biodiversity
Endangered species in areas affected by operations of the organization
Direct and indirect greenhouse gas emissions
Other relevant greenhouse gas emissions
Initiatives to reduce greenhouse gas emissions and reductions achieved
Emissions of ozone-depleting substances
NOx ,SOx and other significant emissions
Total water discharge
Total weight of waste by type and disposal method
Significant spills
Cross-border transport or treatment of hazardous waste
Areas impacted by the organization’s discharges of water and runoff
Initiatives to mitigate of harmful environmental impacts of products
Percentage of products sold and their packaging materials that are reclaimed by category
Significant fines and sanctions for non-compliance with environmental laws
Significant environmental impacts of transporting products, goods, materials and members of
the workforce
Environmental protection expenditures and investments
EV10
EV11
EV7
EV8
EV5
EV5
EV5, EV25
EV9
EV20
EV18
EV22
EV22, EV26
EV27
EV6, EV26
EV28
EV12
EV13
EV4
EV14
EV15
EV17
EV16
EV21
EV29
EV19
EV23
EV24
EV31
EV30
EV1
●
●
◐
◐
●
●
●
●
◇
●
●
◇
◇
◇
◇
●
○
●
◐
●
◐
●
●
◇
○
●
◐
●
●
●
NUMBER INDICATOR BESTREMARK PAGE
53-56
55,57
59
59
59
40-53
59
57
-
57
62
-
-
-
-
58, 70-73
-
58, 74-75
-
35,60
61
56-57
62
-
-
40-53
52-53
64
62
69
Employment
Labor Management Relations
Occupational Health and Safety
Training and Education
Diversity and Equal Opportunity
eMPlOyees
LA1
LA2
LA3
LA4
LA5
LA6
LA7
LA8
LA9
LA10
LA11
LA12
LA13
LA14
Breakdown of workforce by employment type, contract, and region
Employee fluctuation ratio
Benefits provided only to full-time employees
Percentage of employees covered by collective bargaining agreements