Kia Aims for VW-Like Brand Identity

SEOUL – Kia officials want the Korean brand to have a “young-at-heart, adventurous” mainstream identity similar to Germany’s Volkswagen.

Outside the industry, they prefer their brand be thought of in the same sphere as Target and Coach.

Michael Sprague, Kia’s U.S. marketing chief, says hip American discount-retailer Target and leather-goods company Coach, along with social media’s Living Social and computer-maker Apple, are “cool” consumer-lifestyle brands “that have transformed themselves and embraced value.”

Carving out an identity for Kia – specifically, one that differs from sister-brand Hyundai, with which it shares many components – has been a priority since 1998, when Hyundai took a controlling interest in the bankrupt Kia.

By the middle of last decade, the Korean management declared Kia would be the sportier of the two brands, while Hyundai would offer “refined” cars and light trucks.

But Hyundai released the enthusiast-oriented Genesis coupe in 2009, after unveiling the 4-door sedan with a burly V-8 the year before, encroaching somewhat on Kia’s territory. But the overlap issue goes back farther than that.

“I don’t think it was ever correct to say the Hyundai brand couldn’t have a sporty association or couldn’t have vehicles that were a blast to drive,” current Hyundai U.S. CEO John Krafcik told Ward’s in 2006.

Senior Kia officials here insist the brand will maintain its sportiness in the future, with Hyundai models taking a more “classical and traditional” focus.

Thomas Oh: “No plan for additional overseas plant at present.”

Company executives interviewed at Kia’s Seoul headquarters here shoot down several rumors, including a future small roadster (“no plan,” says Soon-Nam Lee, director-Kia’s overseas marketing); a diesel engine for the U.S. (“very expensive,” says Lee); and, despite rising consumer demand and scant dealer inventory, another U.S. factory.

“There’s no plan for an additional overseas plant at the present,” says Thomas Oh, senior executive vice president and chief operating officer at Kia in Korea.

Kia learned “a lesson last year from the Toyota case” and doesn’t want to expand output too quickly and risk harming any gains it has made in quality.

The auto maker opened its first U.S. plant in West Point, GA, nearly two years ago, while Hyundai’s Montgomery, AL, factory began production in 2005.

Both are running near capacity, with West Point due to add another 60,000 units by 2012, at a cost of $100 million. Oh says Hyundai-Kia is closing in on 1 million-unit U.S. sales this calendar year, with Hyundai forecasting just over 600,000 deliveries and Kia 400,000.

Senior Hyundai officials last year told U.S. media in Seoul that a third U.S. manufacturing plant would be considered when 1 million annual units were achieved there.

There also is no plan for a truck. At the 2004 Chicago auto show, Kia showed a concept midsize pickup, the KCV-4 Mojave, but Michael Sprague, vice president-marketing for Kia Motors America, says “No, thank you” when asked about a possible production pickup.

“There are so many other areas we would go into before we would go there,” he says, noting pickup competition in the U.S. is fierce and domestic brands dominate the fullsize-truck segment.

Both Kia and Hyundai will be growing their model lineup, officials say here. The auto makers are expected to have 40 global models by 2013, up from 28 in 2002.

Model proliferation will come while the number of vehicle platforms is whittled down, from 22 in 2002 to six by 2013, Kia spokesman Michael Choo says. Additionally, the percentage of shared suppliers is being targeted to surpass 90% by 2013, up from 78% in 2009 and just 18% in 1999, the year after Hyundai purchased its stake in Kia.

“The cost savings that we’re able to derive from this can be passed on to the end-customer, or can be reinvested in product development,” Choo says. “It allows us to shorten the development period of the vehicles and allows us to improve our quality at a quicker pace.”

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