The Korea Herald


Kia expands U.S. production by 20 percent

By 김주연

Published : June 5, 2011 - 19:07

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Kia Motors Corp., Korea’s second-largest automaker, announced plans last week to raise output at its Georgia plant by 20 percent, underscoring the U.S. industry’s biggest market-share gain this year.

Kia, an affiliate of Hyundai Motor Co., raised its U.S. share 0.8 percentage points to 3.8 percent through May, topping gains of 0.7 point for General Motors Co. and 0.6 point for Hyundai, according to Autodata Corp. The Seoul-based company’s sales volume has climbed 45 percent this year, the fastest pace among the 10 largest automakers in the U.S.

“It’s both skill and luck,” said Ed Kim, an analyst at AutoPacific Inc. in Tustin, California. “Their latest round of products is very good. There is also the circumstance that competitors like Honda and Toyota don’t have as much to sell. That’s allowing Kia to get a little more attention.”

Kia, Hyundai, GM and Ford Motor Co. are among those that have benefited in sales of small and midsize cars as Japan’s March 11 earthquake slowed production for Toyota Motor Corp. and Honda Motor Co. Kia also contends that it has won over customers in those categories with compelling designs and fuel efficiency.

“In what has been a very vanilla, commodity-driven space, we’re offering a product that gets good fuel economy and is easy on the eyes,” Tom Loveless, Kia’s vice president of U.S. sales, said in an interview yesterday. The midsize Optima sedan and compact Soul wagon are standouts in their segments, he said.
Kia Motors Corp.’s factory in Georgia, the United States. (Kia Motors) Kia Motors Corp.’s factory in Georgia, the United States. (Kia Motors)

Sales of the boxy Soul rose 97 percent through May from a year earlier, with the biggest volume gain among Kia models. Optima sales, which have doubled this year, should get an additional boost after production of the car begins at the West Point, Georgia, plant in September, Loveless said.

“We’ve been constrained by supply,” he said.

Kia yesterday announced a $100 million expansion of the Georgia factory that will increase its annual capacity to 360,000 vehicles from 300,000 now.

The plant is moving to three shifts to handle the Optima along with Kia’s Sorento and Hyundai’s Santa Fe sport-utility vehicles already built there, said Randy Jackson, the facility’s vice president. Kia said the plant, which opened in late 2009, will add almost 1,000 workers, for a total of more than 3,000.

“We have very aggressive targets,” Jackson said. “We hope that we can continue growing the way we have been.”

Hyundai, which shares vehicle platforms, engines and a chairman with Kia, has raised U.S. sales 29 percent this year. Seoul-based Hyundai is South Korea’s largest automaker.

The companies, which operate separately, have sold a combined 463,648 cars and light trucks in the U.S., behind only GM, Ford, Toyota, Honda and Chrysler Group LLC this year through May, according to Woodcliff Lake, New Jersey-based Autodata. The combined sales at their growth pace through last month would give Kia and Hyundai a full-year total of more than 1 million for the first time.

“For the last few years Hyundai has been getting all the love,” Kim said. “Now it’s Kia’s turn.”

Kia’s U.S. sales unit is in Irvine, California. The company’s shares rose 400 won, or 0.6 percent, yesterday to 73,100 won in Korea Stock Exchange trading in Seoul.