Loveless: Kia Poised to Take Advantage of Small-Car Shift

Special Coverage

State of Industry: North America

It has been a great year for Kia in the U.S.

Its sales increase of 35.4% through October represents the industry’s largest gain, as Kia rides on a wave of competitive new products introduced in the past 2-1/2 years, including the Sorento and Sportage cross/utility vehicles, Optima midsize sedan, Soul compact box and Rio subcompact.

Kia’s 3.9% market share so far in 2011 puts it ahead of GMC and all European marques, including Volkswagen, WardsAuto data shows.

The Korean brand has topped its 400,000-unit volume goal for 2011 three months early, and executives are looking toward more gains next year.

Kia forecasts U.S. light-vehicle sales will rise to 13 million-13.2 million units in 2012 from an estimated 12.5 million this year, with much of that growth coming from the small-car sector, a strong suit for the auto maker.

In an interview conducted by email, Kia Motors America’s Tom Loveless, vice president-sales, discusses how the auto maker will try to maintain this year’s momentum into 2012 and beyond.

WardsAuto: Has the economic recovery taken hold, or do you fear the U.S. is headed for a double-dip recession?

Loveless: I don’t know that anyone can say where the economy is headed. The current volatility makes planning extremely difficult.

While many of the key economic indicators such as housing and unemployment have not improved, the good news is that the auto industry as a whole is up from 2010 and will continue to elevate slightly next year.

Kia vice president-sales Tom Loveless.

The bad news is that we expect the economy will continue to be a challenge, and the growth we’re forecasting for 2012 will likely come from people who are in need of a new vehicle rather than those who are choosing to purchase.

WardsAuto: What do you expect to be the next game-changer in vehicle technology?

Loveless: Fuel economy will remain a top priority, and new fuel-saving technologies will continue to be introduced across every vehicle segment.

At the same time, owners are bringing more of their own personal technology inside their vehicles than ever before, and manufacturers are responding with easy-to-use solutions intended to make vehicles safer and keep drivers focused on the road.

WardsAuto: Other than the economy, what is the biggest single threat to your business? In other words, what keeps you awake at night?

Loveless: Making sure we take the best possible care of our growing owner base is critical to our long-term success.

We’ve introduced more new vehicles than any other brand over the past three years and gained a significant amount of market share. We’ve turned an important corner, but that kind of growth raises expectations.

With more units in operation than ever before, it is critical that we work with our dealers to build and improve reputations within their individual markets and make the necessary investments to expand the service side of our business.

WardsAuto: How do you see the vehicle-segment mix changing in the U.S. in 2012? How will your business be impacted?

Loveless: Downsizing will continue to be a trend in 2012 and beyond, and any industry gains likely will be driven by small and midsize cars and CUVs.

There’s no question (small-car) volume will grow dramatically over the next few years. And that’s good news for Kia, because we have traditionally been strong in those segments and with products like the (compact) Soul and all-new (subcompact) Rio.

WardsAuto: Are you worried about how Kia will be able to follow up, or top itself, when it comes to the next generation of your models? The bar, especially in terms of styling, has been set high.

Loveless: Our design-led transformation has definitely changed the way people think about the Kia brand, and that is a tribute to the talented global team our chief design officer, Peter Schreyer, oversees.

Many of our newest products bear strong resemblances to the concept cars that preceded them, and if you look at the recent KV7 (van concept from the 2011 Detroit auto show) and GT (large, rear-wheel-drive sedan from this year’s Frankfurt auto show), it’s easy to see why we’re excited about our showrooms in the future.

WardsAuto: Do you see Kia and sister-brand Hyundai’s product lineups eventually diverging more than they have? Similar product, competing in the same segments, didn't work out so well for Saturn and Pontiac.

Loveless: The short answer is yes, we see continued differentiation. At the same time, it’s also reasonable to assume that both brands will have entries in the larger segments.

The truth is, we view Hyundai as a competitor, and many people are surprised to hear how much cross-shopping we see from Toyota, Honda and, believe it or not, several of the luxury brands.

More and more consumers are looking at Kia for the first time based on our vehicle styling and youthful brand personality. There are several vehicles and technologies that are exclusive to Kia, and we’ll continue to develop our brand and portfolio to stand out from all of our competitors.

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