Kia using quality and technology to increase sales and brand prestige

Thu, 11 Apr 2013

Kia is a long way from hawking the anonymous lozenge known as the Sephia on our shores. That was only 1994, though, and in less than 20 years the company has gone from judging its aspirations against Japanese budget competition to walking auto show floors checking out the German standard-bearers for tips on how to increase sales and brand prestige. In an interview with Automotive News, Kia executives laid out their plan for carving out a Volkswagen-like niche for the company whereby they could be viewed as the premium pick in a volume segment. Concepts like the Kia Cub, above, would seem to point in this direction.

Kia is keen to make sure its sales targets don't impinge on its quest for better and better quality.

Kia's prime directive is "an unrelenting focus on quality." The Japanese brands earned a reputation for bulletproof reliability, and Kia is keen to make sure its sales targets don't impinge on its quest for better and better quality – neither in-house nor for its suppliers, a trade-off we've seen go wrong before. It has a Pilot Center that studies each new model for potential production problems before being given the approval for manufacture, and it isn't until the quality control department gives the okay that manufacture can begin.

Assuming quality is assured, the second part of the mission is to develop cars with powertrains that provide "performance-oriented technology." That means putting its small turbo engines in more of its model line, like the new Forte getting the 1.6-liter, direct-injected turbo, more hybrids options among current nameplates and a plug-in hybrid, and bringing dual-clutch gearboxes to the US by 2015.

Beyond the keeping an eye on quality, though, Kia has to keep an eye on the South Korean won. Its plants are now at capacity, it wants to sell 800,000 more vehicles in 2016 than it did in 2012, but the rising value of the South Korean currency means it would need to look at removing content in order to maintain profits. AN said the company will get by right now by trimming the R&D budget and putting more expensive trim packages in the range, but that if that isn't enough it might have to shorten the list of standard features. It's looking at features that customers don't care about, but if it came to that, taking items out would take Kia in the opposite direction of its market segment.

By Jonathon Ramsey