Kia Borrego Enters Tight SUV Segment
If Kia goes where others fear to tread these days, the bold move is not without some potential upside.
CLE ELUM, WA – What this country may not need right now is a new 4,749-lb. (2,154-kg) body-on-frame SUV, not with consumers leaving the vehicle segment as fast as speakeasy patrons fleeing a raid.
Yet Kia Motors America Inc., mindful its timing might be questioned, debuts its biggest and most upscale vehicle yet, the ’09 Borrego. It joins the smaller Sorento and smaller-still Sportage in the South Korean auto maker’s SUV stable.
“How are we going to sell a midsize SUV with gas prices past $4 a gallon, plus the SUV segment dropping?” says Tom Loveless, Kia America’s vice president-sales. “It’s not an equation that necessarily adds up.”
The middle SUV segment has been declining for years, from a high of 1.8 million units in 2000 to less than 932,000 in 2007, according to Ward’s data.
Through June of this year, segment sales were off 38.6% compared with year-ago.
Since last year, five models have left the segment. Now a new one bravely, or brazenly, enters it.
“I’m sure you might have a question or two about our timing for this vehicle,” Alex Fedorak, Kia public relations director, tells journalists attending a Borrego preview here in a mountainous region where legendary highjacker D.B. Cooper bailed from an airliner with ransom money in 1971, never to be found.
Borrego’s towing capacity 7,500 lbs. (3,401 kg) with V-8.<link rel=
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If Kia with the Borrego goes where others fear to tread these days, the bold move is not without potential redemption.
The Borrego is value-priced, yet well-equipped, making it an attractive proposition, especially when price is an object for budget-minded consumers.
“I think the plan was always to out-feature the competition,” auto analyst George Peterson of AutoPacific Inc. says of Kia’s Borrego strategy.
Base price for a LX trim line with a V-6 engine is $26,995, including a $750 destination charge. An EX with a V-8 carries a $32,995 sticker. A loaded model with the bigger engine and 4-wheel drive pushes the price needle past $40,000 and into premium territory.
An ad campaign touts the Borrego as “a new kind of luxury SUV.” However Loveless qualifies that when asked if trying to sell luxury vehicles at mainstream Kia dealerships might be a challenge.
“It’s upscale vs. luxury, and we’re trying to get everyone at dealerships involved in understanding this is a special vehicle,” he says.
Another possible upside for the Borrego is that the middle SUV market might reverse the trend and post sales increases in 2009 and 2010, Loveless predicts.
Some of those additional sales could be transfers from the fullsize market, as many SUV owners downsize but stick with that type of vehicle, he says. “In the end, customers will buy what they need.”
Kia hopes to boost its image with the Borrego.
Since entering the U.S. market 14 years ago with a single vehicle, the Sephia econobox, Kia never has been able to fully shake off a public perception –
by now a misperception – that it only makes cheap compacts, even though its lineup today is a wide range of nine vehicles.
“The Borrego isn’t an attempt by Kia to position itself as a luxury brand, but we do want to attract more customers and different types of customers to our showrooms; people who are more educated and affluent,” says Kia’s marketing director Tim Chaney.
Adds Loveless: “We haven’t had a chance to get in front of affluent suburbia. This vehicle gives us that opportunity.”
It’s an important demographic because suburbanites-of-means represent 25% of U.S. vehicle sales, he says. “It’s a market we traditionally haven’t done well in.”
Borrego’s long-standing competitors include the Ford Explorer, Jeep Grand Cherokee and Toyota 4Runner. The Kia Sorento also is in that middle SUV grouping but, unlike the Borrego, lacks third-row seating and so “was losing the (sales) brochure wars,” Peterson says.
Kia expects most Borrego purchases will come from repeat SUV buyers, particularly those switching from domestic SUVs, Chaney says.
Uncharacteristically, Kia declines to predict how many Borregos it hopes to sell. That reluctance reflects today’s economic uncertainty in the U.S., Fedorak says.
“It’s going to be a challenge for any traditional SUV in this market,” Peterson says. “If they sell 3,000 a month, they’ll be happy.
“The challenge is selling a premium midsize SUV with a Kia nameplate in a shrinking segment, where the (GMC) Envoy and (Chevrolet) TrailBlazer are going away and the Explorer will become a CUV (cross/utility vehicle),” he says.
If Kia knew at the start of Borrego’s product development three or four years ago what it knows now about the current SUV market, the auto maker might have considered making the Borrego a CUV, Peterson says.
Still, the Borrego is an impressive, well-appointed SUV.
Features include six airbags, electronic stability control, a rear-camera back-up assist, voice-controlled navigation system, push-button start and 10-speaker Infinity audio system.
The climate-control system features 16 air vents throughout the vehicle, notes Ralph Tjoa, senior product strategy manager. “A few years ago, auto makers touted the number of cup holders in their vehicles. We’re changing that to air vents. By the way, the Borrego has 10 cup holders.”
To smooth out the ride, the vehicle has eight rubber mounts, a front double-wishbone suspension system, rear multi-link system and hydro-formed frame structure.
Kia’s first-ever DOHC 4.6L V-8 puts out 337 hp at 6,000 rpm with 323 lbs.-ft. (437 Nm) of torque at 3,500 rpm. Its fuel economy is 15/22 mpg city/highway (15.7-10.7 L/100 km) in 2-wheel drive. Kia says that’s best in class, citing Environmental Projection Agency estimates.
The 3.8L V-6 hits 276 hp at 6,000 rpm with 267 lb.-ft. (362 Nm) of torque at 4,400 and with 95% of its torque available at 2,000 rpm, Tjoa says.
A limited edition due out this fall will include heated second-row seats, power-adjusted pedals and chrome accents.
The Borrego’s ride is refined and handling responsive during a media drive on paved roads amid the Cascade mountain range. The route does not include off-roading.
On a couple of occasions where the SUV encounters a rough roadway, it seems jumpy. And although the engines, especially the V-8, offer ample power, the 6-speed transmission takes a quick breath before downshifting.
The Borrego is named for a desert in Southern California. “A rugged vehicle named for a rugged place,” Fedorak says.
It also is a spot where certain wildflowers thrive, despite the harsh climate. Kia hopes there’s an analogy there for its new SUV attempting to take root in a stern market.
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