ATLANTA -- Kia says transaction prices are rising and buyers are selecting higher trim levels, proving that its effort to shed a value-brand image is working.
Kia is working with suppliers to increase output of the high-line EX trim version of the redesigned Sorento crossover, its best-selling model.
"We've seen a huge change in the mix," Steve Hirashiki, Kia Motors America senior product strategy manager, said at a press event here last week. "Before, we were selling a lot of base and LX, and now we're selling a lot more high-range trim, and in fact that's where we're running into some shortages."
Through August, the Sorento accounted for 68,835 of the brand's total sales of 237,953. Kia's sales are up 10 percent so far this year, and in 2009 it was one of only three brands to achieve a sales gain.
"We're working to try and boost capacity" of the EX trim versions, said Tom Loveless, Kia's U.S. sales boss.
This month Kia launched an SX halo trim level for the Sorento, which includes as standard a 3.5-liter V-6 engine and 18-inch alloy wheels, as well as an SX-only instrument cluster. A panoramic sunroof is optional.
The Sorento SX starts at $32,990, compared with a base price of $23,190. Prices include shipping.
The average transaction price for the Sorento, which was redesigned in December, jumped to about $25,600 in July, compared with about $21,500 in July 2009, according to researcher TrueCar Inc. The average transaction price for the brand increased from about $17,908 to $19,559 in the same period.
"It means we're more relevant to the more mainstream Toyota and Honda consumer," Loveless said.
He said transaction prices also are rising for the redesigned 2011 Sportage compared with the 2010 model and for the 2010 Forte compared with the Spectra it replaced.
TrueCar analyst Jesse Toprak said Kia's gains, which outpace the industry average, are significant. But he said other forces affecting all carmakers are helping to drive up transaction prices.
He said transaction prices dipped last summer as recession-weary consumers bought less-expensive vehicles. This year consumers are buying higher-priced vehicles and gravitating toward SUVs again, Toprak said.
He credited Kia with managing its production and inventory properly, keeping vehicles from sitting on dealer lots. That means fewer incentives and higher transaction prices.
"What is happening is really a changing point for Kia," Toprak said. "Consumers are choosing to buy Kia rather than having to buy a Kia. It is selling cars based on their merit rather than just on their pricing."