Kia Rolls Dice on Hatchback

LAS VEGAS - To put it in the local parlance of this gambling mecca, Kia Motors America Inc. appears to be a sure thing.

The Korean importer, already on a roll with sales up 17% in the first quarter (including a 30% rise in retail sales) and the second best-selling small sport/utility vehicle (SUV) in America, is planning a string of new models over the next 18 months that will more than double the breadth of its lineup. By the end of 2001, Kia will add a minivan, midsize sedan and compact SUV to its U.S. showrooms, hoping to work its entry-level market magic in these more profitable segments.

The rollout plan calls for a new, under-$9,000, 1.5L subcompact sedan called the Rio to debut this July as an '01 model. That will be followed by an '01 midsize sedan, codenamed the MS and based on the Hyundai Sonata, in November. In June 2001, Kia expects to launch the Sedona minivan. It will bow as an '02 and be the same size as the popular Honda Odyssey, with a standard V-6 for the price of a 4-cyl. Dodge Caravan. The capper will be a larger SUV, dubbed Sportage II for now, about the same size as an Isuzu Rodeo and due sometime in '02.

None of this will change KMA's basic strategy: to beat 'em on price. "The key to our success is product and price positioning," says Dick Macedo, KMA executive vice president-marketing.

Leading off this product assault is the Spectra, a Sephia-based 4-door hatchback styled to look like a sedan. Geared toward young, male buyers on a tight budget, the Spectra adds a sport accent to the Sephia basics, which include a 1.8L twin-cam 125-hp engine and Getrag 5-speed manual gearbox or optional 4-speed automatic ($975).

The Spectra, based at $10,795, is about the size of a Honda Civic or Ford Focus but built on a slightly shorter wheelbase. It undercuts those two cars in price by $1,500 or more. A sportier GSX model starts at $12,995.

In all, KMA expects sales to total 16,000 units annually, about 60% base models. On sale in Korea as the Shuma for about a year, Spectra almost didn't make it to the U.S., where buyers have been cool to hatchbacks. Call it a gamble for Mr. Macedo and staff.