Kia to focus on localized products

Korean car maker Kia Motors has kick-started the process of developing products specifically built for the Indian market to compete with Maruti Suzuki, the biggest car maker.

The company, more than one-third of which is owned by India's second largest firm Hyundai, thus opened a research and development centre in Hyderabad that is already operational.

Kia, known globally for its compact cars, has begun talks with states for finalising a green field manufacturing plant in India. Government officials from Andhra Pradesh and Tamil Nadu, where Hyundai has its plant, have met Kia officials and offered land, according to sources.

The R&D centre in Hyderabad supports design and evaluation of automobiles with a focus on developing localised products, a note in Kia's latest annual report said. The India centre is one of six outside Korea. Kia, Korea's second largest company after Hyundai, has such R&D centres in the US, Europe, Japan and China. While a R&D centre specially for India may not be new, what makes Kia stand out is that it has not followed the product-first-R&D centre-later norm. For instance, Hyundai's R&D centre came up around a decade after the company set foot in India. French car maker Renault too adopted a similar pattern. Companies generally test the waters before committing investments when entering a new market.

Kia, however, has made a break from that pattern and aims to go after volumes that it hopes would come from products developed keeping in mind local taste and needs. This investment is despite sales slowing in the world's biggest auto market, China. Besides China, Kia is facing slowdown in Russia and other Asian markets. Last year, Kia witnessed worldwide retail sales of 2.91 million units, reporting a flat growth compared to a year ago, when it recorded sales of 2.90 million units.

Kia's retail entry into India, expected to happen before the turn of the decade, will most certainly impact Maruti Suzuki. Kia could look at the compact car segment, which forms around half the domestic market. As Hyundai has already declared its intentions of shifting focus to the premium customers with products like Creta and Elite i20, the void in the cost-competitive segment (sub Rs 4.5 lakh) could be filled by Kia.

Globally, Hyundai and Kia, like Volkswagen and Skoda, and Renault and Nissan, share platforms to make projects cost-effective and generate profits faster. Kia has developed its own models based on shared platforms, which Hyundai has used for making the i10, i20, Elantra, Accent and Tucson. The affordable small car segment has shown a resurgence recently with robust demand seen for the Renault Kwid, Tata Tiago and Datsun redi-Go. Maruti too has shifted focus from its bread-and-butter Alto-Wagon R segment to the premium segment with products like Baleno, Vitara Brezza, S-Cross and Ciaz. This has allowed rivals to eat into its market share.

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Kia's four vehicles win JD Power design awards

IRVINE, CALIFORNIA: South Korea's second largest carmaker Kia Motors' four vehicles Optima, Sorento, Sedona and Soul has earned JD Power Automotive Performance, Execution and Layout (APEAL) awards in their respective segments. The quadruple award win has moved Kia to third in the industry among Non-Premium Nameplates, according to JD Power, propelling the brand up from seventh place in 2015. 

"Customers want vehicles they're proud to drive, and Kia earning four JD Power APEAL awards, a record for the brand, reflects our global focus of placing our customers first," said Orth Hedrick, vice president, product planning, Kia Motors America. 

"Buyers today are smarter than ever and are looking for vehicles that offer a superior combination of design, technology, safety and premium amenities. The Optima, Sorento, Sedona and Soul are prime examples of these important attributes as more people discover the new Kia and its world-class model line every day." 

The Optima won accolades in the midsize sedan, and the Soul in the Crossover segments. The Sorento came out first in midsize SUV segment, while in the Minivan category, the Sedona beat segment rivals. 

The JD Power APEAL study measures new-vehicle owners' overall satisfaction with their vehicles in the first 90 days of ownership. The results are divided into 10 categories and weighted accordingly: exterior, interior, storage, audio, seats, heating and ventilation, driving dynamics, powertrain, visibility, and fuel economy.

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KIA MOTORS EARNS BEST-EVER RANKING IN 2015 J.D. POWER INITIAL QUALITY STUDY

Third Straight Year of IQS Improvement Places Kia Second Among 33 Brands

·         Kia Sorento and Soul awarded for highest scores in compact multi-purpose vehicle and midsize SUV segments as five other Kia models rank among top three in their respective categories¹

·          With nearly 20-percent improvement, Kia owners had fewer issues with their vehicles than nearly all other car and truck brands

IRVINE, Calif., June 17, 2015 – With more units in operation in the U.S. than ever before, Kia Motors reached another historic milestone today when J.D. Power recognized the brand as the second-highest scoring nameplate industry-wide in its 2015 Initial Quality Study (IQS). Kia’s IQS score improved by 20 points over its previous best-ever performance in 2014, vaulting the growing automaker up four positions to second overall among 33 automotive brands and highest among all mass-market nameplates.

Kia’s ascension was powered by segment-leading performances from two of the company’s best-selling vehicles – Soul and Sorento – while the Rio, Optima, Cadenza, Sportage and Sedona models all ranked in the top three of their respective categories.

“We believe the J.D. Power report leaves no doubt that Kia builds world-class vehicles, and the results are especially gratifying as the IQS study truly reflects the voice of our customers,” said Michael Sprague, Chief Operating Officer and EVP, Kia Motors America.  “Kia’s rise is one of the industry’s greatest success stories and is driven by the hard work of thousands of team members around the world as well as our long-term strategy to concentrate on quality, strengthen the brand and elevate the ownership experience.”                                                                    

Kia’s U.S. sales have more than doubled over the last six years as the brand has made significant investments in the market and steadily climbed J.D. Power’s annual IQS rankings. After the Soul was ranked number one in the compact multi-purpose vehicle segment in 2012, Kia broke into the overall top 10 in 2013, with the Soul and Sportage (tie) taking top honors in their respective segments, and then rose to sixth in the industry in 2014.  The company’s $1.1 billion manufacturing facility in West Point, Georgia – Kia Motors Manufacturing Georgia – produces the Sorento and Optima, and achieved its highest-ever quality ranking among plants in North/South America in the 2015 study. Additionally, the Kwangju plant where the Soul is produced ranked number one for the Asia Pacific Region.

Now in its 29th year, the annual J.D. Power IQS analyzes responses from vehicle owners in 26 segments.  IQS is determined by vehicle owners evaluating the driving experience, engine and transmission performance, and a broad range of quality-related problems within the first 90 days of ownership.

About Kia Motors America
Kia Motors America (KMA) is the marketing and distribution arm of Kia Motors Corporation based in Seoul, South Korea, and in 2014 was the #1 ranked mainstream brand according to Strategic Vision’s Total Quality Index.  KMA proudly serves as the "Official Automotive Partner" of the NBA and LPGA and set an all-time annual sales record in 2014, surpassing the 500,000 unit mark for the third consecutive year. KMA offers a complete line of vehicles, including the rear-drive K900** flagship sedan, Cadenza premium sedan, Sorento CUV, Soul urban passenger vehicle, Soul Electric Vehicle***, Sportage compact CUV, Optima midsize sedan, Optima Hybrid, the Forte compact sedan, Forte5 and Forte Koup, Rio and Rio 5-door subcompacts and the Sedona midsize multi-purpose vehicle, through a network of more than 765 dealers across the United States.  Kia’s U.S. manufacturing plant in West Point, Georgia, builds the Optima* and Sorento* and is responsible for the creation of more than 14,000 plant and supplier jobs.

Information about KMA and its full vehicle line-up is available at www.kia.com. For media information, including photography, visit www.kiamedia.com.  To receive custom email notifications for press releases the moment they are published, subscribe at www.kiamedia.com/us/en/newsalert.

* The Sorento and Optima GDI (EX, SX & Limited and certain LX Trims only) are assembled in the United States from U.S. and globally sourced parts

1 The Kia Soul and Kia Sorento received the lowest number of problems per 100 vehicles among compact multi-purpose vehicles and midsize SUVs, respectively, in the proprietary J.D. Power 2015 Initial Quality Study.^SM Study based on responses from 84,367 new-vehicle owners, measuring 244 models and measures opinions after 90 days of ownership.  Proprietary study results are based on experiences and perceptions of owners surveyed in February-May 2015.  Your experiences may vary.  Visit jdpower.com.

^** 2015 K900 V8 available in select trims and in select markets with limited availability.

^*** 2015 Soul EV in select markets with limited availability.

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