Irvine-based Kia Motors America Inc. is keen to imitate its corporate sibling’s success in the midsize sedan market.
The automaker, part of South Korea’s Hyundai Kia Automotive Group, is launching its 2011 Kia Optima sedan into a daunting midsize auto segment dominated by Toyota Motor Corp., Ford Motor Co., Honda Motor Co. and Kia’s sister company, Hyundai Motor America Inc.
Kia hopes to replicate the success of the 2011 Hyundai Sonata sedan, which has driven growth for the automaker.
The Optima is “planned to be one of our pillar vehicles,” said Tom Loveless, vice president of sales at Kia. “We plan to sell a lot of these cars.”
The Hyundai Sonata, reintroduced earlier this year, has been a hit for Hyundai. During the summer, Hyundai raised production of the Sonata 80% to keep up with demand.
“We can’t seem to make enough to satisfy the market,” said John Krafcik, chief executive at Fountain Valley-based Hyundai Motor America.
Hyundai sold 128,484 redesigned Sonatas from January to August, up 33% from a year earlier.
Now Kia hopes to make a splash with the redesigned Optima, which is set to compete with the Sonata.
Market Growth
The midsize segment, representing about 1.7 million vehicles or 15% of the yearly auto industry, is expected to grow by almost 50% by 2015.
“We are very well positioned to capitalize on the growth in the market,” Kia’s Loveless said. “Our growth is driven by this product design transformation.”
Kia has had two generations of the Optima before the 2011 version. Earlier models weren’t the automaker’s best sellers.
It sold 19,198 Optimas from January to August, down 22% from a year earlier. The Sorento crossover utility vehicle has been the automaker’s best seller this year at 68,000 sold through August.
The Optima is “way down toward the bottom in term of sales,” Loveless said. “There are lots of opportunities for us in this segment.”
The 2011 model represents the latest in a two-year push for the automaker to change the way the market perceives Kia, an effort that started with the 2010 Kia Soul.
“We have been going through this design transformation for the last 18 months,” said Michael Sprague, vice president of marketing and communications.
Kia owes a lot of its recent success to the Soul, a small, boxy compact that impressed the industry with styling and marketing.
The company sold 43,678 Souls through August, double from a year earlier.
“We have people waking up on Saturday to get out of bed and say ‘I’m going to buy a Kia today,’” Loveless said. “I’m not sure that used to happen before the Soul.”
Kia was one of the stars of the auto industry’s downturn in the past few years, the worst seen since the 1970s.
The automaker saw a 19% decline in sales with 32,465 vehicles sold in August, a drop largely due to the government’s “cash for clunkers” program a year earlier.
For the 12 months through August, Kia sold 237,953 vehicles, up 10%.
Kia vs. Hyundai
Overall, Kia has seen its market share grow in the past year to 3.1% versus 2.9% a year earlier.
But the automaker has been overshadowed by bigger sibling Hyundai, which saw a 17% sales gain through August.
Hyundai sold 363,491 vehicles for the period, or about 35% more than Kia.
The automaker is putting a significant amount of marketing behind the Optima launch, comparable to its recent Sorrento push that saw TV, radio, print and online marketing. The vehicle launch also included a coveted Super Bowl TV spot.
Kia isn’t saying how much it plans to spend on the Optima launch.
“We are taking the playbook we did with the Sorrento and using it as a framework,” Sprague said.
If it’s anything like the Sorrento launch, sources expect the automaker to spend about $80 million in advertising and other marketing.
Kia plans a two-phase campaign, the first starting in November on the heels of the vehicle arriving in showrooms. The second phase is planned for February.
“We estimate it will hit 70 million-plus consumers,” Sprague said. “It will be a brand message, entertaining, and, of course, highlighting the car.”
The automaker is targeting Generation X—adults ages 35 to 49, sandwiched between the baby boomers and millennials.
Kia hasn’t released prices yet.
“We are a few weeks away, but we are shooting for under $20,000 and hopefully it’s significantly under that,” Loveless said. n