Kia Not Ready for Luxury Brand

While its sister brand Hyundai is marching ahead with a separate luxury brand, dubbed Genesis, Kia is not ready to go there yet.

And with the way luxury manufacturers are invading the turf of mass-market makes, such a thing may not be necessary, says a Kia U.S. official.

“The dynamic, the environment’s changed. I don’t know if you have to go out and establish something new,” Michael Sprague, chief operating officer-Kia Motors America, tells WardsAuto in a recent interview.

He cites as a case in point the Mercedes-Benz CLA sedan, originally priced at $29,900, but for ’16 starting at $32,050.

“They’ve got their $229,000 vehicle (Maybach, various AMG models) and they’ve got their $29,000 vehicle,” he says. “They didn’t go to market with a separate brand once they crossed that threshold of, say, sub-$40,000.”

It may not be that officials at Kia’s corporate parent in South Korea feel the same way (Hyundai Motor America reportedly was overruled on the Genesis brand), but nevertheless Sprague says KMA will study a luxury brand.

As far as he’s concerned, Kia has just dipped its toe in the luxury waters with the 2014 U.S.-market debut of the K900.

The ’16 version of the large luxury sedan, derived from the same platform as Hyundai’s current-generation Equus sedan, ranges from $49,000 for a base V-6 model to $61,900 for a V-8-powered grade with luxury appointments such as wood-trimmed seat backs and a suede headliner.

Kia also retails the luxury-leaning, front-wheel-drive Cadenza sedan, which debuted in 2013 and competes against Hyundai’s Azera as well as the Toyota Avalon and Ford Taurus.

“I would say we’re still in launch mode for the K900 and Cadenza,” Sprague says. “The K900 has only been out a year-and-a-half, so we’re still raising awareness for the K900 and showing consumers what the brand can do.”

Despite many third-party accolades for the K900, sales of it and the Cadenza are low and likely another reason Kia is not pursuing a standalone luxury marque.

WardsAuto data shows Kia sold 2,362 K900s through November and delivered 6,745 Cadenzas.

While the K900 is up 90.9% from the same period year-ago, the Cadenza was down 22.6% and in total the two cars trail Hyundai Genesis and Equus volume of roughly 30,000 units through November.

Sprague expects growth next year in K900 volume, as the V-6 is new for ’16 and should appeal to a wider swath of buyers than a V-8. Kia wanted to launch with a V-8 to establish the K900 as a “credible luxury vehicle,” he says.

The V-6 should attract a broader base of customers, based on data that shows 70% of sales in the mid-large sedan segment are V6-equipped cars.

Kia retails the K900 in the same limited, curated way Hyundai does with the Genesis and Equus: in a showroom-within-a-showroom setting.

Only a fraction of Kia’s U.S. dealers, approximately 200, sell the K900.

The brand makes available a display kit, which includes faux-wood flooring and a tablet, that dealers can use to visually separate the luxury car from Souls, Sportages and Optimas.

“Again, it’s part of the evolution and our learning as we go to market with this vehicle,” Sprague says.

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