Kia dealers, accustomed to focusing on entry-level shoppers, have a new opportunity this year: selling a new $25,000 sedan, the Amanti. Getting the launch right is crucial, as are the marketing efforts for the new car, says Monroe Lee, chairman of the Kia Dealer Council.
"That's a segment that we've not entered - a $25,000 Kia," says Lee, who owns five Kia AutoSport dealerships in Florida and Georgia. "And we have to have a quality product in that segment. We can make no mistakes with that product."
Overall quality remains the top priority for Kia dealers, Lee says. The brand has made "astounding improvements" in that area, he says, but continued progress is needed.
Another challenge for Kia, he says, will be finding the funds to market its growing eight-model line aggressively. He was interviewed by Staff Reporter Gregory Skwira.
How would you sum up the past year for Kia?
On the whole, it was a good year until we ran out of product in late September and October because of a strike in Korea. I didn't have but 20 cars at the end of October at all five stores. I probably lost 400 new-car sales.
What are some of the dealer council's top concerns?
Quality. We want them to continue quality improvements. And they have made astounding improvements in quality since I've been a Kia dealer. The Sorento, Sedona and Optima are right on. The quality is comparable to anybody.
We've got the new Amanti, and the dealer body was really excited by the way the car looked. I think we all question if they have the marketing to promote the car.
Now we've got the Sedona, the Sorento, the Spectra four-door, the Spectra five-door, the Optima, the Rio, the Rio Cinco and the Amanti. With eight products to promote, it's going to get a little busy out there.
Any other concerns?
We're excited about the Circle of Excellence program (which requires exclusive franchises and upgraded facilities). It seems that they're being real aggressive in promoting and assisting dealers with that program. They've got almost 50 percent of the dealer body signed up for it.
If it weren't for the $300-per-car incentive, how many dealers would you see signing up?
You'd probably have 30 to 40 percent who probably wouldn't do it.
In general, how well does the factory respond to your concerns?
As a whole they're very attentive. One thing they have done is empowered regional managers to make a lot of decisions. It really helps when you have the ear of the people who can make a decision and help you.
What kinds of decisions are you talking about?
Day-to-day stuff - warranty issues, distribution problems. You pick up the phone if you have a warranty issue, and they're very responsive.
What is the top priority of the dealer council in 2004?
Continue the improvement in quality - make sure we have the product that is engineered properly from the factory to give us our continued growth. We started out as a subprime company, and we're in that metamorphosis of changing into a Tier 1 company.
What is Kia's hot product, and what is the weak link?
The hot products are the Sorento and the Sedona van. Having the five-star crash rating and the 10-year/100,000-mile warranty, it's just hard to compete with. Our value advantage has been a large key to our success.
I think our Rio and Spectra are getting a little dated.
Do your dealers have the right product mix and overall marketing strategy to be successful?
Were going to see with the new Amanti. That's a segment that we've not entered - a $25,000 Kia. And we have to have a quality product in that segment; we can make no mistakes with that product.
Does Kia belong in the $25,000 sedan segment? Is a customer really going to pick a Kia Amanti over a Nissan Maxima or Toyota Avalon?
There's still about a $4,500 to $5,000 price advantage in that car. So you've got a good value. Safetywise, it has all the airbags and some of the amenities of the European cars. Kia has promised us that we'll be able to make a good value statement. I think value, quality and safety are the three key elements that they're hitting on.
What is it going to take for consumers to consider Kia on par with Toyota and Honda in terms of quality?
I think it's going to be through product and product quality - to chip it away. I think we've made some tremendous strides in the last few years. But you're going to have to keep making those big steps and improvements to make sure you're really a player.
I think the warranty gives people peace of mind to try us. And as long as we can show continued improvement, I think we'll be OK.
Are you worried at all that Toyota's Scion brand will crimp your entry-level sales?
It would be silly to say we weren't concerned. But I think as far as the value aspect, I'm hoping that they can't be competitive with us as far as value. Provided we keep improving the overall quality, we can be there with them.