Industryweek 1468 21092 Tom Lawless

On the Rise -- Kia Stresses Value in Tight Times

Feb. 11, 2010
The South Korean car company is making inroads into the U.S. auto market.

You likely avoided watching television altogether if you missed Kia Motors Corp.'s ads for its new assembly plant in West Point, Ga. After 15 years in the U.S. market, the $1 billion facility stands as a very concrete reminder that the South Korean automaker is a growing presence in the United States.

Tom Loveless, vice president of sales for Kia Motors America, said having the U.S. plant is helping the carmaker appeal to the "portion of the marketplace that is very skewed towards 'Buy American.' We are hearing more and more as a result of the ad campaign people are coming into our dealerships that didn't have Kia on their radar screen that do now because of the presence in the states."

Tom Loveless, vice president of sales, Kia Motors America

Last year, Kia posted its 15th consecutive year of sales growth in the United States. According to Ward's AutoInfoBank, Kia sold 300,063 cars in 2009, a 9.8% increase from 2008. That was more than such familiar nameplates as Mazda, Subaru, Volkswagen and BMW.

Kia fueled its sales growth with well-received new models -- the Forte compact sedan that competes in the largest car segment; a sporty two-door version called the Forte Koup; and the Soul, a squared-off hatchback aimed at Gen Y consumers that the company refers to as an "urban passenger vehicle."

Kia had appealed to budget-minded consumers, and that niche fit well with recession-wary consumers. However, Loveless said the company is offering more than just the cheapest price. "I would change 'budget-minded' to 'value-minded.' There is a difference. Value is what you get for your money. When you think about value, you think about things we get a lot of credit for -- fuel economy, safety, quality and our growing technology. All of that adds up to a really good package of value for the money." Loveless adds that these new models also are making an emotional connection between buyers and the brand.

The Sorento, a compact SUV, is the first vehicle being produced at Kia's new assembly plant in West Point, Ga.

Kia is hoping its value proposition works again with its first 2011 model, a compact SUV called the Sorento. The company has pulled out the stops with its largest launch. The SUV was featured on the company's first billboard in Times Square and on the company's first Super Bowl ad.

The Sorento is the first vehicle being produced at the West Point plant. The facility sits on 2,200 acres and includes a body stamping plant, a transmission shop and a two-mile test track along with the main assembly plant. At full capacity, the plant will be able to produce 300,000 vehicles a year and will employ 2,500 people. Kia says the plant will eventually result in 10,000 employee and supplier jobs in the region.

Loveless, with more than 20 years of experience at U.S. automakers, shies away from comparisons with his previous employer, DaimlerChrysler, but he credits Kia with being "absolutely a passionate company" that operates with a sense of urgency. He notes, "Speed, their ability to react to market dynamic shifts, is very quick and driven by this ability to get information to the right people. We are able to respond to improved market awareness and improved consideration with shifts in production and so forth much faster than I was ever accustomed to." If Kia continues its rapid sales growth, that culture of urgency and agility will indeed be a vital attribute.

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