The-Kia Automotive Group’s foray into the world of LPi hybrid vehicles appears to be hitting a speed bump.
TheAvante LPi and Kia Forte LPi hybrids both use a common liquefied petroleum gas- injected engine combined with a lithium polymer battery-powered electric motor. The technology was developed at the Hyundai-Kia engine center in Namyang, Korea.
Hyundai Motor Co. Ltd. early projected sales of more than 8,000 Avante LPi Hybrids in the vehicle’s first 12 months of availability.
The Avante is the domestic version of the Elantra, Hyundai’s best-selling export vehicle. The ’09 gasoline-powered Elantra was rated the highest-quality compact in the U.S. in a J.D. Power & Associates quality study measuring 228 attributes.
Launched last July in Korea at a price of 20 million-23 million won ($17,658-$20,307), Hyundai tallied more than 1,000 orders for the Avante LPi in just 14 days. That was well ahead of expectations, according the auto maker’s statement at the time.
The price of the Avante LPi is considerably higher than the lowest-priced gas-powered version, which has a price tag in Korea of just 11 million won ($9,712). A 3 million won ($2,648) government incentive for consumers who purchase a hybrid vehicle hasn’t been as effective as hoped.
Hyundai this month has begun offering price reductions of up to 2.9 million won ($2,560) as well, to buoy lagging sales, according to industry data.
Deliveries of the Avante LPi topped 1,000 units in July, August and September 2009, before sharply dropping to 625 in October and just 485 in December. Sales rose moderately to 526 in January, but plunged to 266 in February.
Even with LPI costing just half as much as gasoline, consumers don’t keep their cars long enough to amortize the higher cost of the LPi hybrids, industry analysts say. In Korea, consumers tend to replace their cars every four or five years.
Sales of Kia Motors Corp.’s Forte LPi Hybrid have fared even worse.
When the LPi Forte was launched in September, deliveries hit 615 units. But sales dropped sharply to just 172 in October, then doubled to 307 in November. In December, Kia delivered just 260 units, which plunged to 78 in January before a moderate climb to 208 last month.
The Kia Forte LPi Hybrid with basic trim is priced at 21,875 won ($19,313), while the gas-engine version retails at 13,560 won ($11,972).
“It’s hard to pinpoint a reason for the slow sales of the Forte Hybrid, but the initial high number can be accredited to new-model effect," a Kia spokesman tells Ward’s.
“The difficulty in maintaining a high, steady level of sales can be attributed to the fact that Korean consumer awareness of hybrid technologies is low compared to a country like Japan, which has been marketing hybrids for the last 20 years or so.”
Hyundai and Kia, combined, sold 474 of the 591 hybrid vehicles delivered in Korea in February. Imports accounted for the other 117 hybrids. That includes 54Priuses, which have been selling above the 100-unit level in October, November and December.
Some analysts believe consumer interest in hybrids will pick up when Hyundai launches its Sonata version later this year.
Conversely, while the market for hybrid vehicles has dwindled in Korea, consumer appetite for car-based SUVs is gaining. Hyundai’s total SUV sales in the year’s first two months totaled 18,704 units, a 70% year-over-year increase. Kia’s 2-month SUV deliveries surged 50% from like-2009.