Kia Not Hitting the Panic Button on Sales

MINNEAPOLIS – Kia officials say they are not panicking, despite the automaker recording its sixth monthly U.S. sales decline of the year in September.

"As we've mentioned before, this is a journey – we're not looking at (our standing in the U.S. market) on a month-to-month basis," Michael Sprague, executive vice president-marketing for Kia Motors America, tells WardsAuto in an interview here at a '14 Soul media preview.

Kia sales fell 14.1% last month from year-ago on a daily-rate basis, to 38,003 units from 48,105.

In recent years, especially in 2010 and 2011 when Japanese rivals Toyota and Honda U.S. sales declined following recall and natural-disaster woes, Kia was on a hot streak, registering consecutive monthly gains.

But every Kia model posted losses last month, including the new Forte compact and refreshed Sorento CUV, both of which have been struggling throughout the year.

"We're launching, as we've talked about, seven all-new or redesigned vehicles, and that doesn't happen overnight," Sprague says. "You've got to sell down the old inventory and build up the new inventory. For Sorento we had that issue. Now we're at good inventory levels."

WardsAuto days' supply data confirms the Sorento fell below the industry average in every month this year. The CUV ended September with a 43 days' supply, lower than the 62 days' average stock of light vehicles.

The second-generation Forte sedan debuted in the spring, but Kia has been without the 2-door Forte Koup and 5-door variants for months, Sprague says.

The Sorento exceeded year-ago volume only in January and August, while Forte deliveries were in the red only in July.

While they originally were set to go on sale in the U.S. in the third and fourth quarters, start of production for the two Forte variants is this month in Korea. "So we’re not going to see those (at U.S. Kia dealers) until the end of the year probably," Sprague says of shipping time.

He doesn't address the Forte Koup and hatchback's delay, but mentions August's strike by unionized auto workers in Korea as hampering Kia's ability to receive deliveries of other models, such as the Soul.

In August, Kia headquarters estimated the strike cost more than 20,000 units of production.

The Korean automaker's U.S. sales and marketing arm is looking forward to the fourth quarter, as the second-generation Soul begins arriving at dealers and the refreshed '14 Optima also debuts on the showroom floor.

For 2013, Kia aims to exceed its 2012 sales of 557,599 units by roughly 20,000, targeting a 3.9% share of a 15 million-unit U.S. industry total.

Next year, Kia will launch a Soul EV in the U.S., and if various reports are to be believed, a large, rear-wheel-drive, near-luxury sedan.

Kia Korean officials stated two years ago during a U.S. media visit to Seoul that the car, known as the K9 in Korea and Quoris in the Middle East, would be sold here.

U.S. executives have shied away from that statement, saying it was important first to establish the Optima and large front-wheel-drive Cadenza sedan as credible entrants in their segments.

Sprague maintains no decision has been made on the K9's U.S. launch.

He says the model's poor performance in South Korea, where Kia has slashed prices, added standard equipment and made available a uniformed chauffeur, is not a red flag, noting the U.S. market is very different.

Kia aimed for 2,000 monthly sales of the K9 in Korea, but volume has been as low as the 400 units seen in July.

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