Kia's success may be costing it talent

LOS ANGELES — The first week of January saw Kia Motors America celebrating sales numbers that were down just 4.8 percent during the 2020 pandemic as the brand prepared a fresh product offensive for years to come.

There were reasons for optimism beyond its winning streak of cars and crossovers: Sales chief Bill Peffer had taken over the COO role on Jan. 1 as a reward for Kia's performance last year when its retail sales hit a record high.

But less than one week elapsed before Peffer resigned on Jan. 7, becoming the third COO at Kia Motors America to leave over the course of three years. Peffer was named CEO of Maserati North America last week.

Kia's dealers were caught off guard, having gone through a similar process in June 2020 when Peffer's predecessor, Michael Cole, left for a CEO role at Hyundai Motor Europe. Cole had taken the Kia job in mid-2018.

"I think sometimes you become a victim of your own success with Kia," said James Morrell, chairman of the Kia Dealer Advisory Council and co-owner of Destination Kia in Albany, N.Y. "Kia is a great launching pad, and hopefully it keeps bringing in the right people and keeps moving forward."

Cole and Peffer became hot commodities in the industry as Kia's star rises.

"Both of them were promoted prior to their departure, but sometimes you just get a bigger opportunity," Morrell said. Cole's title changed from COO to president in 2019 but he remained No. 2 to CEO Sean Yoon.

Peffer did not respond to a request for comment last week.

While Kia has suffered its share of management turnover, the U.S. organization has been relatively stable for an industry where people come and go with regularity, Morrell said. He mentioned company executives in distribution and service roles who have been known to Kia dealers for many years.

Yoon himself will mark three years as head of Kia Motors America in March. He was also named CEO of the North American region two years ago.

In the wake of the executive turnover, Morrell said the most important thing to dealers is maintaining the programs Cole and Peffer developed with Yoon's support over the last three years.

Chief among them is a simplified dealer incentive program that puts less emphasis on hitting volume targets, Morrell said. Retailer profitability has improved. Sales satisfaction scores still lag the industry overall but have edged higher.

Morrell said he takes heart that the brand's leadership has been steady at the very top.

"We haven't had turnover at the top, which ultimately is what changes things," Morrell said in reference to Yoon. "We don't get everything we want, and they don't get everything they want, but it's been a pretty good partnership."

In fact, Kia's U.S. operations have gone through less upheaval in recent years than some other brands, including corporate sibling Hyundai, whose North American headquarters is 10 miles from Kia's in Orange County.

Since Jose Muñoz took over as CEO of Hyundai Motor America in May 2019, the brand has a new sales chief, marketing chief, product development leader, communications director and CEO of luxury brand Genesis.

Karl Brauer, executive publisher at CarExpert.com, said "it's unfortunate to see heavy turnover at any automaker, as it often precedes a decline in areas ranging from sales to product development to customer and dealer satisfaction.

"However," he added, "turnover is not uncommon with the Korean brands at the leadership level.

"Kia has seen plenty of success over the past 10 years. And for now, the turnover hasn't damaged sales or customer satisfaction."