Kia Motors America Inc. President Michael Cole has hit the ground running.
The executive, who was promoted to the top spot at Kia Motors America at the end of October, recently helped the Irvine automaker take the wraps off the Seltos crossover utility vehicle during the Los Angeles Auto Show.
The move bolsters Kia’s presence in the red-hot SUV segment—now comprising about 40% of worldwide car sales, up from 20% in 2010—while solidifying the company’s overall product mix.
“It is the last piece of the puzzle for us” in SUVs, Cole told the Business Journal from the auto show floor at the Los Angeles Convention Center.
“We now have this full lineup and basically whatever the consumer wants, we can offer.”
The Seltos, which goes on sale in the first quarter, will retail at just under $22,000 for the LX. Additional prices are expected to be released closer to when it goes on sale.
The vehicle touts all-wheel drive and sits between the slightly smaller Kia Soul (starting around $17,500) and the larger Sportage (a $24,000 starting price).
Covering Bases
The carmaker’s collection of sedans, meanwhile, remains strong, Cole pointed out, from sub-compact Rio (starting around $15,000) up to the K900 luxury sedan (about $60,000).
Cole views the overall range as allowing the automaker access to “every area of the market” as it now turns to more buzzy topics the broader industry is tackling including electrification, mobility and the balance between traditional versus more progressive ways of driving the U.S. business (see story, this page).
Kia Motors America last week reported 50,504 vehicles sold in November, up 12% from a year earlier. The performance was led by sales of the company’s Sportage crossover utility vehicle, with 8,125 units sold. That’s up 17% from the year-ago period.
“On the strength of best-ever monthly sales for Telluride and the strongest November sales performance for Sportage, Kia continues to grow in a down market,” said Bill Peffer, vice president, sales operations, Kia Motors America, in a statement last week.
Brand Elevation
Cole’s not new to Kia, having spent the last decade with the automaker. He stepped into his current position after having previously served as Kia Motors America’s chief operating officer and executive vice president. Before that, he worked for Kia’s Europe division.
“My focus is always going to be on Kia continuing to elevate the brand,” Cole said.
It’s still a youthful nameplate, he added.
“We don’t have the heritage or the history of so many of the domestic brands or even the Japanese brands that have been in this market 60 years plus.”
Cole said his main task as president is strengthening the brand’s image and reputation.
“To be honest, we have an awesome lineup of vehicles that not only look great, but the quality’s outstanding,” he said. “People might be aware of the brand, but do they really understand just how strong [it] is? And that’s our challenge.”
Part of that hurdle isn’t new for the company or its sister badge, Fountain Valley-based Hyundai Motor America Inc., which itself must also run up against heritage brands in the U.S. and its own positioning—at least initially in this country—as a value-oriented play.
On a combined basis, Kia and Hyundai are the No. 7 automaker in the U.S., with a market share just under 8% in the third quarter of 2019, according to data from Statista.
Emotional Engagement
“As a younger brand, we’ve probably attracted the sort of view of being all about affordability,” Cole said. “We’re very proud of the value we offer customers. We need to ensure though that people aren’t buying our vehicles just for rational reasons. Rational reasons are great. I want to appeal to all those practical and rational reasons, but also for emotional reasons and that is the transition we’re making, where people are choosing us because they say ‘Wow, I love this brand and I love what the brand stands for.’”
To that point, Kia last month held its first ever Kia Fest, a mostly marketing-fueled endeavor that brought nearly 1,000 Kia owners and 200 cars for one big party.
The event could become an annual occurrence, although nothing’s set yet, Cole said.
Changing Auto Industry
Kia Motors America President Michael Cole’s aim to broaden how the brand resonates with buyers comes as the carmaker also takes part in industry conversations on the next set of challenges for the sector, such as mobility and new ways of thinking about running an automotive business.
“I’ve been in the industry 35 years and I think the change we’ll see in the next five years is greater than all the change we’ve seen in 35,” Cole said. “It’s probably greater than the change” over the past century.
How drivers navigate roads—and whether that’s via their own vehicles, ridesharing or autonomous cars—is shifting the landscape.
Kia’s Fountain Valley-based sister company Hyundai Motor America began an autonomous vehicle pilot program Nov. 4, offering on-demand use in Irvine of Kona electric SUVs, dubbed BotRide, for the test. Passengers order the service via an app created by New York mobility tech firm Via Transportation Inc.
Hyundai Motor Co. head of business development, strategy and technology Christopher Chang said the pilot aims at studying consumer behavior in ridesharing via autonomous vehicles. “We are going to learn about ecosystems, where the vehicles travel and optimize the customer experience,” Chang said.
Here are Cole’s thoughts on some of the next-gen issues facing automakers.
Mobility Solutions:
“People are obviously looking for mobility solutions and people talk all about mobility as a service rather than car ownership,” Cole said. “To a degree, we have been seeing some transition of that from car ownership to car leasing to subscription-type services.”
This will continue, he said, and “we’re obviously looking at what does that mean for Kia? We see our future very much as being a mobility provider whether people want to own a vehicle, lease a vehicle, subscribe to a vehicle or do some sharing-type scheme.We will try things. We’ll be ready to make sure we can offer consumers the solutions they want.”
Subscription Services:
Automakers have tested or are testing vehicle subscription programs. Whether it sticks in the long-term isn’t known.
“It’s interesting,” Cole said. “A few people have tried it and it hasn’t worked so it’s not an easy solution, but I think there is some potential for it. It depends how each subscription model works.”
Kia is “looking at different ways of doing subscription. Is it people want to have a vehicle and then a different usage at the weekend for a vacation, or is it more about subscribing for [one car] for a period of time and then maybe trading that for something else?”
Urban areas may make more sense for such a service; it may not make as much sense in more suburban swaths of the country, Cole said.
Adaptation and Brands:
These big-picture issues fit with Cole’s larger vision and focus, which is continuing to strengthen the Kia brand. The idea is a strong brand gives flexibility to make more seamless moves and transitions into new efforts, whether that’s a traditional course or charting innovative paths.
Cole takes a three-pronged approach: product, communication and experiences.
“It’s a challenge,” he said. “We’ve got to keep doing the conventional, traditional business, but we have to be mindful of how consumer demand” is changing.
— Kari Hamanaka
