Seoul, South Korea
Thomas Oh, senior executive vice president, and chief operating officer at Kia in Korea Soon-Nam Lee, director-Kias overseas marketing, and Michael Sprague, Kias U.S. marketing chief, were interviewed at Kias Seoul headquarters.
In July 2011 the Hyundai group was only 7,000 units away from beating the Chrysler group in sales. The Chrysler group consists of Chrysler, Dodge, Ram, Fiat, and Jeep. One would think that Kia and Hyundai would be conspiring to beat the Chrysler group in sales in August. Kia might have been able to beat Chrysler, but according to Ward’s auto data summary, “Hyundais DSR was up just 4.9%, it’s the worst year-over-year result (excluding comparisons with Clunker months) since June 2009.
But sister-company Kia had it’s best August to date, with 41,188 sales, lifting it’s DSR 22%. Together the Korean automakers outpaced Honda for the second straight month.” But not Chrysler.
Oh outlined three pillars of the Kia model for success;
1. Kia must have a very good product – Kia has learned it’s lessons from watching mistakes Toyota has made. Kia’s market share aspirations are high and they know if they mess up their quality in their car the warranty claims will go up, and their brand identity will go down.
It also means bringing out new technology. The 2012 Kia Rio will be the first U.S. car to have gasoline direct injection (GDI) and ISG (a start-stop system) available.
Soon-Nam Lee, director-Kias overseas marketing, said that at the Frankfurt auto show Kia will show a rear-wheel-drive concept car that would compete in the BMW 3 -Series segment.
Lee went on to say that Kia will not be adding a small roadster to the portfolio. While Kia’s diesel engine sells well in Europe the United States won’t be getting a diesel either. And when Sprague was asked about a pickup truck (because of the “KC4-Mojace” concept shown earlier) he emphatically said, “No thank you. There are so many other areas we would go into before we would go there”
Kia is known for its 10-year, 100,000 warranty. That warranty is not transferable and Oh says there are no plans to change that.
2. They must have a very good advertising/marketing campaign – Kia has seen a lot of success advertising the digital market. They plan to continue their marketing strategy
3. They must have a strong dealer network – Kia has no plans to open another plant in the United States.
Kia cars are benchmarked against European cars, cars such as Volkswagen with a youthful appeal. The Kia Rio was benchmarked against European cars, such as the Peugeot 207, but also against the Ford Fiesta. Each car Kia produces is made for the youthful sporty class.
Kia is recycling and reusing products, cutting their expenses on products and cutting emissions. Kia says that their standards on atmospheric and water pollutants are stricter than the government’s codes. Two of the Korean plants, Sohari and Hwaseong, generate no landfill waste and haven’t for years. The amount of steel and other products used are going down. Even energy consumption has gone done.
By decreasing waste, Kia is able to make more profit. Marketshare in the United States is growing for Kia. In July 2011 the Chrysler Group (Chrysler, Dodge, Mopar, Fiat, Ram, and Jeep) sold 112,000 units. The same month the Hyundai group (Hyundai and Kia) sold 105,000 units.