Kia Continues to Draw New Buyers to Brand

NEW YORK – Paced by sales of its Georgia-built Sorento midsize cross/utility vehicle, Kia Motors America Inc. is surging ahead of last year’s record-breaking volume, with deliveries up 14% through May.

Michael Sprague, vice president-marketing, says this month’s sales are headed in the same direction. “We anticipate our best June ever,” he tells the International Motor Press Assn. here.

The Sorento, which Sprague says is the 14th best-selling model in the U.S., is attracting younger, better-educated and more-affluent customers to Kia.

The CUV’s average transaction price is about $25,000, and the front-wheel-drive 4-cyl. LX model is leading the charge with 37% of sales.

The Sorento racked up a record 9,156 deliveries in March, helped to some degree by Kia's Super Bowl TV advertising in February, he says. It was the first time the auto maker has bought air time during the event.

Kia also is competing in motor sports for the first time this year and recently sponsored a Ladies Professional Golf Assn. tournament. In addition, the auto maker recently completed its third year of National Basketball Assn. sponsorship.

The Sorento competes in a segment that includes the popular Chevrolet Equinox, Ford Edge and Toyota RAV4. It also attracts customers who cross-shop the segment-leading Honda CR-V.

Sorento attracting younger, better-educated and more-affluent customers to Kia.

“We're essentially keeping up with the rest of the market,” says Sprague, who has been with Kia for two years. He is the son of a car dealer and previously spent a dozen years marketing Ford vehicles. He also served a brief stint with Mazda Motor Corp.

Sprague admits Kia is offering some cash incentives this year but insists his goal is to spend less on spiffs overall than the rest of the industry. “Consumers are looking for value and great design,” he says.

Kia also offers safety, technology and a superior warranty, he notes. Most importantly, customers are attracted to the brand's fuel economy, with an overall portfolio that averages 31 mpg (7.6 L/100 km).

Another big advantage for Kia is its product freshness. Some 85% of its lineup has been introduced in the U.S. in the last 22 months. The Sedona and Optima, introduced in 2007 and 2006, respectively, are the oldest models.

Funky Soul CUV started brand transformation.

Sprague says the funky Soul CUV, which debuted in March 2009, started the transformation. It was followed by the Forte and Koup. The Sorento introduction enhanced the new image. “Great product makes my job so much easier,” he says.

Although Kia is owned by Hyundai Motor Co. Ltd., there is not as much cross-shopping with the sister brand “as we would expect,” Sprague says.

Buyers of the two brands historically have been about the same age. But Kia recently has been attracting younger customers.

“We keep our brands pretty separate,” he says. Kia shares production facilities with Hyundai around the world.

However, Sprague declines to comment on whether the Hyundai Santa Fe will be built at Kia’s West Point, GA, plant that currently assembles the Sorento.

The new factory, which is in the process of adding a second shift, has a nominal capacity of 300,000 units annually, and the Sorento appears headed for sales of about 85,000 units this year. The plant easily could accommodate one additional model.

Kia says industry volume should end up at about 11.8 million units this year. That should grow to 13.8 million next year and climb to 15.6 million in 2012.

Sprague's challenge, therefore, is to keep Kia's current momentum going.

“We attract buyers from Toyota, Honda, Ford and Chevrolet (brands),” he says. However, he has not been able to track whether any of the Toyota conquest customers have come to Kia because of the Japanese auto maker’s safety-related problems this year.

Sprague points to the advertising campaign for the Soul that features hamsters, which has been a huge success in helping to project the brand as an alternative to the appliance image from which many in the segment suffer.

The Korean auto maker, which entered the U.S. market in 1994, has the products to stay ahead of its competitors, he says. “We are positioned to handle an upturn in the economy. Kia is more than a value buy.”