Niro Leads Ioniq as Hybrid CUVs Sizzle

Kia sold more units of its Niro in the U.S. through June than sister-brand Hyundai sold of the Niro’s compact platform-mate the Ioniq, showing Kia’s decision to do a CUV, not a car, is paying off in the utility-vehicle-obsessed U.S. market.

Some 12,676 Niro sales were tallied in first-half 2017 compared with 4,881 Ioniq sales, WardsAuto data shows.

Both the Niro and Ioniq went on sale in February in the U.S.

Within Kia’s lineup, the Niro is outselling the brand’s Optima Hybrid sedan by wide margin. This mirrors a situation at Toyota, where all hybrid car sales are down this year, but the Japanese automaker’s hybrid CUVs, the RAV4 and Highlander, are up.

RAV4 Hybrid and Highlander Hybrid sales rose 7.7% and 201.3%, respectively, through June. Meanwhile, Toyota’s hybrid cars, the Avalon, Camry, Prius and Prius C, are down by double-digit percentages vs. year-ago.

Kia, Nissan and Toyota are the only mass-market brands in the U.S. selling hybrid CUVs. Nissan won’t release sales figures for its Rogue and Pathfinder hybrids. WardsAuto estimates Nissan sold 818 Rogue Hybrids from March, when it went on sale, through June. That is a relatively minor amount vs. the 20,770 RAV4 Hybrids delivered in first-half 2017.

When Korean automaker Hyundai began development of its dedicated eco-vehicles nearly six years ago, Kia’s U.S. team was adamant their brand’s entrant be a CUV, not a car, Steve Kosowski, manager-long range strategy for Kia Motors America, told WardsAuto on the web series Autoline After Hours in May.

“We really from the beginning of the program did not want to do another Prius, Insight, Ioniq – a Leaf, a Volt – that sweeping-fast-aero-Kammback shape,” Kosowski said, basing the decision on negative customer feedback toward that vehicle design and wanting its eco model to be “distinct within the marketplace.”

Furthermore, Kia has relatively strong CUV sales with its Sportage and Sorento models, and was sensing a “secular change” in 2011 and 2012, around the time the Niro’s development began, toward utility vehicles. 

“There was a key meeting we had in early 2012 with our leadership in Korea where we basically got the whiteboard out and said, ‘Guys, the vertical line is fuel economy and the horizontal line is going from sedans to utility vehicles,’” Kosowski said. “‘There’s this big wad of highly fuel-efficient cars over here and there’s not much up here. We think there’s a great opportunity for a highly fuel-efficient utility vehicle, enough that we want to go here.’”

Kia wants to sell 3,000 Niros per month, or 36,000 this year. That’s 9,000 shy of the 2016 tally of Toyota’s RAV4 Hybrid.

However, as Toyota officials have said of the RAV4 Hybrid, Kosowski says Kia likely could exceed its targeted sales this year if it could get more Niros. The Niro is being assembled for global markets at Kia’s Hwasung, South Korea, plant.

Sales in Hyundai and Kia’s home market of South Korea similarly were in favor of the Niro through April, the most recently available data.

Niro sales tallied 6,378 and Ioniq deliveries stood at 3,241 there in the year’s first four months. As the two models have been on sale in South Korea for more than a year, the Niro’s tally was a 161.0% increase from January-April 2016 while the Ioniq slipped 14.9%.

Kosowski is surprised more non-luxury brands don’t have hybrid versions of their CUVs, given the price premium the CUV body style commands and their skyrocketing popularity.

Ford and Subaru used to sell hybrid versions of their respective midsize and small CUVs, the Escape and XV Crosstrek. General Motors has fielded hybrid pickups and large SUVs, but never CUVs. In recent years, the Detroit Three have paid more attention to electrifying cars than utility vehicles, although FCA now offers a plug-in hybrid variant of its new Chrysler Pacifica minivan.

“I’m a big proponent of electrified utility,” Kosowksi said. “It makes so much sense be it a hybrid plug-in hybrid or an EV, for a variety of reasons. The height of the body allows you to package the battery under there…which neatly helps the (coefficient of drag) of the vehicle because the weight is down low. (And) the utility aspect of the vehicle allows you to charge a premium which covers your material cost of the car.”

Honda is expected to retail a hybrid version of the CR-V midsize CUV in coming years, while rumors have circulated another Ford Escape Hybrid is in the works.

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