Kia: The Little Brand That Could (If Hyundai Would Let It)


Kia Motors America has been the fastest-growing car company in the United States over the last five years, and that vibe continued in April: Kia sales were up 1 percent for the month over a year earlier for its best ever April sales, even though, like all auto brands, it had three fewer “selling days” during the month.

Yet like every other month, Kia’s accomplishment probably won’t get as much attention as another fact from the April sales reports: Hyundai, its sibling brand, also posted a 1-percent increase for the month.

That’s just the way it is for Kia, whose biggest shareholder (and competitor) is Hyundai. The Seoul-based brands share a chairman and much of the guts of their vehicles. Both Hyundai and Kia also sell mostly small, fuel-efficient cars. But from those commonalities, the two brands diverge sharply.[more]

Hyundai sells more vehicles, over a broader range of types and prices, and has much bigger brand awareness and higher-notch perceptions among American consumers. Kia, well, has less of everything.

“Hyundai has been aggressively marketing their products in the U.S. for quite some time,” noted Kim Byung Kwan, a securities analyst in Seoul, to Bloomberg. “Hyundai’s lineup is fully diversified, from small cars to luxury sedans.”

And so while many would-be Hyundai buyers in America also consider Toyotas and Hondas, for instance, few of them give much thought to buying a Hyundai instead. On the other hand, Hyundai is the most-considered other brand by those shopping for a Kia. Also, Kia’s relative lack of awareness forces brand executives to offer more generous sales incentives than Hyundai does to American consumers, eating into financial resources and profits.

Following their own path on the heels of Hyundai’s greatly expanded brand profile in the United States, Kia executives lately have been pulling out a lot of stops of their own. Like Hyundai, they’ve also advertised — although in the last two Super Bowls, not the last three like Hyundai.

And like Hyundai’s American “voice” Jeff Daniels, Kia also sports a well known brand ambassador in the United States — NBA star Blake Griffin, with Michelle Wie also appealing to golf fans.

So Kia, like the lovable hamsters who peddle its Soul model, is huffing and puffing. But it may never catch Hyundai.