Kia Seeks Premium Brand Status by 2017
Kia aims to be a "first class brand" by 2017, according to Kia Motors Vice Chairman Lee Hyung-keun. The carmaker plans to make this happen by introducing luxury vehicles like the Kia Cadenza (below), the Kia K9 (above) and the Sorento R, and by participating in more sports sponsorships, according to The Korea Herald.
Lee's announcement happened at a large gathering of Kia dealer franchise owners in Vancouver last month; over 100 countries were represented.
While Kia has performed well in the U.S. and other markets in terms of sales, the brand's reputation has lagged, especially when compared with its kin Hyundai. Like Hyundai, Kia has seen its sales increase sharply — it will likely exceed 550,000 this year in the U.S., double the sales pace of 2008 — but the smaller Korean carmaker has increasingly used incentives to move its vehicles, according to Bloomberg News. Hyundai has decreased incentives by 26% this year (to $823 per vehicle) whereas Kia has increased its incentives by 8.5%, to $1,677 per vehicle, according to Autodata.
Furthermore, while the Hyundai brand is considered by 20% of new-car shoppers, only 9% of consumers considered Kia, according to Strategic Vision. This means Kias are considered by fewer car shoppers than those who look at Dodge- or Chrysler-brand vehicles while Hyundai is cross-shopped as often as Chevy or Volkswagen, according to the study.
As a member of the Hyundai Motor Group, Kia shares most of its engines, transmissions and car platforms with its bigger sibling, but both maintain separate factories, finance, sales and design operations. That means the carmaker should have access to the same parts that put together the V-8-powered Hyundai Genesis sedan and Equus. So far, Kia has yet to offer any rear-wheel-drive premium vehicles. That will change when the K9 — which looks eerily like the BMW 7 Series — comes to the U.S.
Lee also said the K9 does not represent an attempt by Kia to make a separate luxury brand. like Hyundai, Kia's premium vehicles will bear the brand's emblem.
Kia Motors Vows to Become Premium Brand by 2017 (The Korea Herald)
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Not gonna work. No one is going to buy an overpriced KIA. Hyundai doesn't even sell that many Equus and is percieved as superior over KIA. It's like Wal-Mart selling designer knock off clothes. Even Nissan; which is a larger company took 20 years to firmly establish Infiniti even though they were known for racing and superior engines. KIA? I think they are still associated with the bargain bin no matter how much lipstick you put on the thing.
Agree. The biggest mistake Hyundai made is selling the Genesis and Equus as Hyundais. It sounds like Kia is wanting to make the same error.
I mean, it's not like the Equus was a rip off the S-class and LS460...so don't be surprised when the K9 looks alot like the 5/7 series.
It looks more like a 5-Series GT with a Jaguar XF profile to me!
I think Kia has always had aspirations to move upmarket. I remember when I rented an older Optima for the first time. It was weird looking but drove nice and I found out later that Porsche designed the transmission in that car for KIA.
I agree with "M". Why put substantial money into KIA when there are better cars out there for the money? If I have the money to burn, I'm going to put it into something more substantial.
The K9 is no more a "knock-off" than the Genesis was. It's a premium platform with an engine, transmission, and technology that is competitive with cars selling tens of thousands more.
Let's face it anyone buying a $50,000 plus vehicle is doing it at least partially as a status symbol. Regardless how good the car is don't see Kia gaining that reputation anytime soon.
Your also leaving out the ownership experience. Luxury buyers like to be pampered when they bring their vehicles in for service and will frown if they get a Kia Rio or an Enterprise rental for a loaner. If Kia and Hyundai doesn't want to invest in a stand alone luxury brand, they should split the cost between them and create a joint venture. That way no one would think they are driving a clone of the other.
@jay
Nailed it!
I don't think they're going for LUXURY, but rather premium. I found a good explanation on the 'net. The Hyatt isn't premium if you're used to a W, but is if your previous experience has been with Holiday Inn. I think that's more of what they're going for.
@Derrick G
Hyundai, in their sales materials, has often compared the new Azera to Lexus. Now, I consider Lexus to be a luxury vehicle. If you consider Lexus to be a premium brand than I would agree with you but we would still have a conflict of definition.
@Lance
Comparing mass-market cars to luxury brands has been going on for years. Remember the Granada commercials comparing it to a Mercedes? Did that mean Ford was trying to become a luxury brand? No; it was, like Hyundai, doing some puffing.
@Derrick G
Yeah, good point but I actually think Hyundai is serious about people cross shopping while Ford wasn't IMO.
Please try to understand that the Genesis and Equus are for branding. It boosts sales of the Sonata, Elantra, and Accent. They are not trying to make loads of profits selling the Genesis and Equus. If they create a separate brand for those two cars, Hyundai's image will not be as good.
Oh, like Lexus was bad for Toyota and Acura was bad for Honda and Infiniti was bad for Nissan? I don't think any of these luxury brands hurt the image of the parent company at all and actually enhance. Hyundai is just trying to do it on the cheap and I think it will cost them in the long run.