One automaker’s loss may be Irvine-based Kia Motors America Inc.’s gain.
Kia, part of South Korea’s Hyundai Motor Co., is looking to take over some dealerships being cut by General Motors Corp. and Chrysler Group LLC.
“We are a challenger brand looking for growth,” said Tom Loveless, vice president of sales at Kia. “The reality is that some of our competitors are reducing their footprints and the number of outlets they have.”
Chrysler, which emerged from bankruptcy in June, plans to cut a quarter of its showrooms. General Motors, which emerged from bankruptcy last week, also plans to cut dealerships and is selling its Saturn Corp. unit.
Nearly 800 dealers selling various Chrysler brands are expected to close this year. General Motors plans to close up to 2,600 dealerships by next year.
The moves open the prospect of Kia adding dealerships in
more high-profile markets, according to Loveless.
“Part of our growth opportunity in the future is in bigger markets where real estate is traditionally more expensive and land is less available,” he said. “In normal times, it has been difficult to gain access into those markets.”
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Loveless: “looking at it as an opportunity to expand our reach” |
Orange County is part of the focus, Loveless said.
“We think there is an opportunity for growth in Orange County driven by our product lineup more than anything,” he said.
Local dealerships that have closed in the downturn include Saturn of Anaheim, Planet Acura of Buena Park and Costa Mesa Hyundai.
“We do have some things in the works, but I’m not a liberty to share the specifics,” Loveless said.
For the past three months, Loveless said he’s had a meeting a week in Irvine about taking on potential dealerships.
He also said he’s been flying around the country and calling up potential dealerships.
The automaker recently picked up several former Saturn dealerships on both coasts, according to a report in Automotive News, part of Detroit-based Crain Communications Inc.
Kia is looking to have dealers reopen closed Saturn sites as Kia dealerships, and it also is appealing to some surviving Saturn dealerships to convert to Kia, according to the report.
Additionally, the automaker is asking some remaining Saturn dealers to consider opening an adjacent Kia dealership, it said.
“Several Saturn dealers have been contacted, and that’s the extent of it right now,” Loveless said.
Kia is being selective, according to Loveless. Many of the dealerships abandoned by its rivals were closed for good reason, he said.
“We’re not running out and just carpet-bombing the market with Kia stores,” Loveless said.
A lot of dealers are coming to Kia, he said.
“We are receiving more calls than we have ever received in the past,” Loveless said. “But we’re not running out and putting anyone in business that gives us a phone call.”
Kia now has 636 U.S. dealerships, with about 60% being just Kia dealerships and the rest being shared with another brand.
The automaker is feeling the industry’s downturn,the worst in recent memory,although it’s faring better than many.
Kia sold 26,845 vehicles in June, down 5% from a year earlier and up 3% from May.
In all, U.S. auto sales fell 27% in June from a year earlier. That’s helped Kia gain market share as its sales haven’t fallen as fast as those of other automakers.
Kia now has about 3% of the U.S. auto sales market, up by 50% from a year earlier.
“If that number were to hold for the rest of the year, it would be almost unprecedented,” Loveless said.
Kia ended 2008 with 2% of the market.
The automaker’s inexpensive, fuel-efficient vehicles are holding up well during the recession. It also has something of a cult hit on its hands with the Soul, a boxy and funky midsize sport utility vehicle that came out in February and appeals to young people.
“We introduced the Soul earlier this year and it really opened up a new demographic for us as a brand,” Loveless said.
