Seoul, Korea – Kia means “rising out of Asia” on the John Batchelor radio show. John Batchelor talked to Lou Ann Hammond, CEO, www.drivingthenation.com about Kia, history, present and future.
Kia started as a manufacturer of bicycle parts in 1944 under the name Kyungsung Precision Industry. In 1961 Kia started producing motorcyles and in 1973 Kia opened the first fully integrated production plant named Sohari. The Sohari plant is close to Seoul and is one of the zero percent landfill plant in Korea today. In 1974 Kia produced Korea’s first mass production car, the Brisa.
But Kia fell on hard times. Kia was virtually bankrupt when Hyundai rescued them. Hyundai currently owns 38% of Kia, Kia’s largest shareholder. There were other companies that were interested in buying Kia, including Ford Motor Company. Kia had a long standing relationship with Ford. Kia built the Ford Festiva for export in 1986, or Pride as it was known in Korea. But Hyundai won the bid, and in 1998 the Hyundai-Kia automotive group was formed.
The obvious reason might look like country loyalty, but the loyalty might come from a different reason. Kia has been the Korean supplier of military vehicles for the past thirty years. Kia also supplies countries like the Philippines and Indonesia with their military vehicles. It wouldn’t sit well with the Asians to have the company that supplied vehicles to their military owned by another country.
Before the turmoil in Syria Kia was selling 50,000 unit’s a month, making it number one in market share in Syria. When I asked Hank Lee, Vice Chairman and CEO of Kia Motors why he didn’t sell military vehicles to Syria Lee said that Kia would not sell military vehicles to Syria, that Kia/Korea is an ally of the United States. Kia has a manufacturing plant in Georgia and sells them in America.
Ever since Kia was saved by Hyundai they have seen themselves as an underdog with something to prove. People in the United States think of Hyundai and Kia as the same car company. Kia, nor Hyundai, see it that way.
In July, 2011 the Hyundai group was only 7,000 unit’s 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. But Kia has a bigger prize in sight – beating Hyundai Motor sales.
In Korea the average GDP per person is $20,000. In America our average GDP is $40,000. In Korea the average gallon of gasoline is $8 a gallon. In the United States a gallon of gasoline will cost, on average, under $4 a gallon.
Kia is bringing out new, and refreshed, product. The 2012 Kia Soul will have a new engine and refreshed styling. The 2012 Kia Rio will be the first Kia car in the United States to have a gasoline direct injection (GDI) with idle stop and go technology (ISG), commonly known as start-stop. Both of those cars are inexpensive and will get 35 miles per gallon and 40 miles per gallon respectively.
Those two Kia vehicles will help in closing the gap of 14,000 sales between Hyundai and Kia in July, 2011. But the drive to close the gap goes further. Kia has said it will bring out a rear-wheel drive vehicle. Kia will show a concept car at the Frankfurt motor show. They will also bring out a CUV electric car in 2014.