With the recent launch of the all-new Cadenza, Kia’s most concerted foray into premium territory, it is easy to forget just how far the South Korean automaker has come since its humble beginnings in the U.S. market only a couple decades ago. Following the critically-acclaimed Optima, the Cadenza continues the brand’s upward climb into uncharted territories and will serve as a bridge to the upcoming Quoris, the company’s future flagship luxury sedan. While it may seem unusual to associate Kia with the likes of premium German and Japanese marques, given the Koreans’ track record and rapid ascension in the States, it may not be long before the automaker reaches new heights that were once considered unthinkable.
Kia Motors Corporation was founded in 1944, eventually becoming the oldest manufacturer of motor vehicles in Korea, and went on to produce the country’s first small-size passenger car in 1974. However, it was not until 1992 that Kia Motors America was established to begin selling automobiles in the United States, starting with the Sephia and Sportage passenger cars. Initially, business for the U.S. subsidiary was gradual through the mid-1990’s, but as a result of the Asian Financial Crisis that shook economies and devalued currencies throughout Asia in the summer of 1997, parent company Kia was forced to declare bankruptcy. Subsequently, Hyundai Motor Company became the majority stakeholder of Kia in 1998, which quickly rebounded to reach milestones of over 100,000 units sold in America by 1999 and 200,000 units by 2001.
Over the next decade, Kia continued to steadily expand its footprint in the U.S. auto market while increasing its visibility worldwide through aggressive marketing and key organizational moves. Beginning in 2002, the Korean automaker commenced its partnership with the Australian Open tennis grand slam to raise brand awareness as a major sponsor. Four year later, Peter Schreyer, who famously designed the original Audi TT to much critical acclaim, was lured away from the Volkswagen Group to be hired on as Chief Design Officer for Kia with the task of infusing style and emotion into the brand’s products. The automaker then became the official automotive partner of FIFA, including the World Cup, as well as the National Basketball Association in 2007 and 2008, respectively. Two momentous occasions highlighted 2010 for the company, as Kia began advertising during the Super Bowl, which it has done every year since, in addition to the grand opening of Kia Motors Manufacturing Georgia, a $1 billion manufacturing facility in West Point, GA that currently builds the Sorento and Optima.
Astoundingly, coinciding with all of these efforts has been unremitting sales and market share growth for Kia Motors America. Through 2012, the brand realized an increase in sales every year since entering the U.S. market, with the exception of 2008. However, even in that Great Recession-induced down year, the overall car market performed significantly worse. What makes Kia’s sales performance so astonishing is the fact that not only has the industry had atotal of eight down years since 1993 compared to just one for Kia, but also the Korean brand experienced 14 consecutive years of increased sales before its streak was snapped.
From a market share perspective, the run that Kia has been enjoying is even more impressive, as the automaker has successfully increased its share every year since Kia-branded cars were first sold in the United States. Through the U.S. subsidiary’s formative years through the 1990’s and heading into the early 2000’s, Kia products were seen as a cheaper alternative to other established carmakers, which helped its sales and market share grow steadily. However, once Peter Schreyer introduced his revolutionary designs, followed by increased visibility as a result of well-executed marketing initiatives, market share began to take off with. In 2012, year-end share for the Korean automaker was 3.77%, which is notable considering the brand’s share was less than half that at only 1.86% just five years earlier.
Such progress cannot be taken for granted, however, as past success does not guarantee future success, which is why Kia continues to transform its reputation. Through the first five months of 2013, Kia sold 226,815 units, which is a decline of -4.5% compared to last year’s 237,381 new deliveries. Current May year-to-date market share also fell to 3.5%, which is down -0.5% from last year’s 4.0% year-to-date share.
While these results are not ideal, Kia is not panicking as it stays the course to evolve from its bargain brand image into one conveying style, quality, and luxury through its new products. According to LMC Automotive, total sales for Kia in 2013 are forecasted to be 536,397, which would be a -3.8% decrease from 2012, however, sales are projected to jump to over 600,000 units the following year while steadily improving through the rest of the decade. With the arrival of the new Cadenza, as well as the future Kia Quoris, the Korean carmaker is showing that there is no time to rest as it begins its journey into the luxury market. Kia has already proven that through its persistence and tenacity in growing sales and market share, it is able to turn heads and make a name for itself, which is why we should probably think twice before questioning their newest endeavor. After only two decades in the United States, Kia has certainly proven to be a formidable player in the market and it looks like there is much more of its story left to be written