Kia will boost supply to reverse sales slip

Kia Motors America Executive Vice President Michael Sprague, right, engages Don Hicks, Shortline Auto Group, Denver, Colo., immediately following the Kia make meeting Sunday.

Photo credit: JOE WILSSENS
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NEW ORLEANS -- Kia dealers will see vehicle availability and marketing funds increase in 2014 as the brand seeks to reverse its first annual U.S. sales decline since 2008.

Don Hobden, executive manager of six Kia dealerships in Kentucky, Alabama and Indiana and chairman of Kia's dealer council, said Kia executives told dealers at the brand's make meeting that about 23,000 units of additional production will be available for the U.S. market in 2014.

Kia sold 535,179 vehicles last year, down 4 percent from 2012 while U.S. industry sales grew by 8 percent. The extra production, plus a 62-day supply of inventory to begin the year compared with last year's roughly 30-day stock, should put Kia dealers in a good position to rebound from last year's slip, Hobden said.

"I think it's a huge win for Kia to have incremental volume available year-over-year," Hobden said.

The Kia Forte compact and Sportage small crossover will see availability grow, dealers said after the make meeting. Forte supplies, for example, were interrupted last spring during the vehicle's 2014 model year changeover.

"They're increasing the mix on some of our prime sellers that we've had some shortages on, and, of course, we're going to go with the K900 that we're hoping will increase the whole image of the Kia product line" said Ken Phillips, one of Kia's highest-volume dealers with three stores in California and Washington, referring to the brand's rear-wheel-drive luxury sedan launching this year.

After a launch-heavy year last year, Kia is paying more attention to improving its overall brand and regaining sales momentum for core products like the Optima mid-sized sedan, Soul subcompact and Sorento crossover, dealers said. Kia launched a redesigned Forte compact car lineup, a Soul boxy subcompact and a new Cadenza sedan last year. This year's launch schedule includes lower-volume vehicles like the new K900 flagship arriving this spring and a redesigned Sedona minivan that debuts in the third quarter.

Lighter schedule

Kia dealers said the lighter launch schedule should let Kia allocate more funds to support higher-volume vehicles like the Optima and Soul.

The K900's launch was a major topic of discussion. Sales targets for the car were not announced, but dealers said the vehicle would be sold initially through about 250 of Kia's roughly 780 dealerships.

The K900's marketing campaign will kick off with a Super Bowl TV spot on Sunday. Michael Sprague, executive vice president of marketing for Kia Motors America, said he hopes the K900 will act as a halo product to lift consideration and consumer opinion of the rest of Kia's product lineup.

"We see the K900 as a flagship for the entire brand," Sprague said. "When people see how great this car is, we expect that it will lift Sorento, Optima, Cadenza, because people will say, 'Wow, a luxury vehicle from Kia? If they can do that, imagine what they're doing with Rios, with Souls and Sportages and the others.'"

You can reach Ryan Beene at rbeene@crain.com. -- Follow Ryan on Twitter


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