SEOUL (Reuters) - Shareholders of Kia Motors Corp <000270.KS> approved on Friday the appointment of Kim Ik-whan as new co-CEO, replacing the son of the Hyundai Motor Group chairman, a move analysts say was the result of poor earnings.
Kim was named vice chairman last year.
Chung Eui-sun, son of Hyundai Motor Co <005380.KS> chairman Chung Mong-koo, will continue to serve as the company's president for overseas business, a spokeswoman said.
Following the news, Kia shares fell 2.12 percent to 11,550 won by 0219 GMT, lagging the transportation equipment sector's <.KS42> 0.56 percent gain and KOSPI's <.KS11> 0.72 percent rise. Hyundai Motor Co also fell 1.1 percent to 71,900 won.
"Chung appears to be stepping down to take the responsibility for the underperformance so far," said Song Sang-hoon, an analyst at Heungkuk Securities.
Kia, an affiliate of Hyundai Motor, has three chief executives: Chung Mong-koo, who is also chairman of the Hyundai Motor Group, Cho Nam-hong, and Kim, who now replaces Chung Eui-sun.
Kia, which together with Hyundai Motor is ranked the world's No. 6 carmaker, sells about 80 percent of cars abroad.
The maker of the Sportage sports utility vehicle and the ultra-compact car Morning reported operating losses in 2006 and 2007. Sluggish domestic sales, a lack of clear hit models and the won's
"Ever since Chung Eui-sun was elected as one of the CEOs, both internal and external circumstances around Kia have not been good," said Suh Sung-moon, an analyst at Korea Investment & Securities.
This year Kia faces mixed market conditions as the recent weakness in the won's value is expected to help earnings, but rising prices of raw materials are set to hurt the firm.
Growth prospects in the United States and China, the world's two top auto markets, are clouded by fierce competition and a looming U.S. recession.
Kia is forecast to earn 264.2 billion won ($262 million) in net profit this year, up from 13.6 billion won earned in 2007, according to Reuters Estimates.
(Additional reporting by Park Ju-min and Cheon Jong-woo)
(Reporting by Rhee So-eui, editing by Marie-France Han and Jacqueline Wong)