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Goes Both Ways: Free-trade pact sees South Korean brands losing share at home

France has been vocal, but not alone, in noting the rise of the South Korean automakers in Europe. The signing of a free-trade pact in 2011 between South Korea and the EU, along with the especially value-conscious buyers in a crisis-stricken Europe, has seen market share increases measuring in the double digits for Hyundai and Kia - analysts expect 14-percent growth for the two in 2012.
A report in Bloomberg has found that there's pain at the other end, too: The pact more than halved import tariffs on European cars headed to South Korea to 3.2 percent, and prices are now close enough to domestic offerings for more South Koreans to pay the premium for foreign luxury nameplates and the cachet they confer. Products sold by the five domestic automakers hogged 92 percent of the market last year, and sales have dropped 5.2 percent this year whereas import sales have risen by 24 percent. This will mark the first year that imports claimed ten percent of the market; compare that to 2002, when domestic market share in the world's 11th largest auto market was 99 percent.
The Germans are at the head of the arrow, counting for 65 percent of imported car sales, but every foreign maker has seen double-digit gains. Analysts think foreign makes could ultimately grab 15 percent of the market.

Kia America shuffles executives

Kia announced a sudden and massive shuffle of its most senior executives in North America, including the resignation of its CEO and new roles for some of his top lieutenants. The biggest change is the departure of Byung Mo Ahn, who had until now served as both CEO of Kia Motors America and head of the company's manufacturing operations in Georgia, as well as a group vice chairman. Ahn is stepping down from all three positions with immediate effect, but will stay on in an advisory capacity. In his place, Jang Won Sohn moves from his previous post as a senior vice president at the home office to take over Kia Motors America. The task of running Kia Motors Manufacturing Georgia will fall to Hyun Jong Shin, currently the plant's executive vice president and chief operating officer. Along with those replacements, Kia promoted Michael Sprague (pictured) to the newly created position of COO and executive vice president for Kia Motors America – a step up from his current title as EVP of sales and marketing. He reports directly to Sohn and takes over responsibility for product planning as well as sales, marketing and service. KIA MOTORS AMERICA STATEMENT REGARDING ORGANIZATIONAL CHANGES Effective immediately, the Group Vice Chairman and CEO of Kia Motors America (KMA) and Kia Motors Manufacturing Georgia (KMMG), Byung Mo Ahn, has left these positions and will become a company advisor. Jang Won Sohn, formerly a Senior Vice President at KMC, assumes the position of President and CEO of KMA, and Hyun Jong Shin, formerly KMMG's Executive Vice President and Chief Operating Officer, assumes the position of President and CEO of KMMG. Michael Sprague, formerly KMA's Executive Vice President of Sales and Marketing, has been appointed to the newly created position of Chief Operating Officer and EVP of KMA, reporting directly to Mr. Sohn, and will serve as the central point of contact for all sales, marketing, service and product planning functions.

Porsche tops J.D. Power quality index as Korean brands soar

While complaints about infotainment systems remain a thorn in the side of automakers for J.D. Power's annual Initial Quality Study, there's a lot to celebrate this year. The average number of problems reported per 100 vehicles fell to 112 in 2015 – a three-percent improvement compared to 116 in 2014. The results of this year's survey are based on the responses of over 84,000 people about problems within the first 90 days of buying or leasing a 2015 model-year vehicle. For the third consecutive year, Porsche tops the rankings with an average of 80 problems per 100 vehicles. Although, that's slightly more than the 74 the German sportscar maker scored in 2014. "While the Japanese automakers continue to make improvements, we're seeing other brands, most notably Korean makes, really accelerating the rate of improvement," Renee Stephens, vice president of US automotive quality at J.D. Power, said in the study's release. In fact, Kia ranks as one of the biggest movers in this year's list. The Korean brand jumped to second place from seventh last year. The company had an average of 86 problems per 100 vehicles, a 20-point improvement. Third place went to Jaguar with an average of 93 problems reported, versus last year's second-place finish with 87 of them. Fourth place was Hyundai, and fifth-place Infiniti also earned a gold star for improvement with 97 issues per 100 vehicles – 31-points better than last year. Fiat still anchored the bottom of the list. However, its 161 problems this year is a lot better than the 206 in 2014. Ranked by nationality, Korean brands (Hyundai and Kia) are now leading the industry in initial quality with an average of 90 problems reported per 100 vehicles. According to J.D. Power, this is the first time Europe's figure beat Japan with 113 and 114 issues, respectively. The American brands also averaged 114. Whereas General Motors dominated last year, the segment awards are spread out in 2015. GM, Hyundai, Nissan, and Volkswagen Group are all tied with four models each earning prizes. For more information, you can also see all of the graphs, here. J.D.