THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Sunday, January 26, 1997 TAG: 9701250541
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY AKWELI PARKER, STAFF WRITER
LENGTH: 90 lines
South Korea's Kia Motor Corp. is ready to slug it out in the low-price trenches.
Kia planted its flag in Virginia last week, opening 10 dealerships and bringing its nationwide total to more than 220 in 24 states.
Local Kia franchises include Greenbrier Kia in Chesapeake, Hall Kia in Virginia Beach, Oyster Point Kia in Newport News and Poquoson Kia in Hampton.
Aiming to cash in on the exploding market for smaller, cheaper sport utility vehicles, Kia's Sportage SUV starts at around $14,500 and poses a direct challenge to rival ``cute utes'' such as Toyota's RAV4 and the Suzuki Sidekick.
``It enables families to afford a sport utility vehicle,'' said Rick Gallaer, president of the Pomoco Group Kia at Poquoson Motors in Hampton.
In 1993, Kia embarked on a methodical U.S. sales campaign, starting on the West Coast and gradually marching east. The company had reached the Carolinas by last August.
``We started researching this in 1994,'' Gallaer said, explaining what interested the dealership in new-kid Kia. ``It sounded like a well-planned process. They weren't just coming in and blitzing.''
With its slow-growth, market-by-market roll-out, the company intends to avoid what it considers a strategic blunder by Seoul-mate Hyundai - getting too big, too fast, said Kia spokesman Geno Effler.
Like an army that advanced too far ahead of its supply lines, Hyundai's excursion into the United States was marked early on by problems with quality and parts availability.
Instead of rapid growth, Kia is concentrating on cozying up to customers with its standard 24-hour roadside assistance and exhaustive satisfaction surveys.
Kia Motors America, the company's U.S. sales, marketing and distribution arm, is based in Irvine, Calif., and has distribution centers in California and Georgia.
In addition to ports of entry in Los Angeles, Tacoma, Wash., and Jacksonville, Fla., the company is ``investigating'' other port and distribution sites on the East Coast, Effler said.
For now, Kia's U.S. offerings include the Sephia, a compact sedan starting at around $9,800, and the Sportage. Three more models are in the works.
Despite Kia's lack of northern exposure in the East, New Englanders have been known to drive to North Carolina for the Sportage, according to Car and Driver magazine.
William Shepherd, owner of Greenbrier Kia in Chesapeake, knew the brand would take off when auto dealer friends in California gushed over it.
Said Shepherd, ``We're selling them as fast as they hit the ground.''
The United States is old territory for Kia.
The company was able to explore the American market while building two no-frills gas sippers for Ford: the cubish but popular Festiva in 1987 and later its more aerodynamic successor, the Aspire.
And although it might not be a household name in Virginia, Kia has been around for more than half a century. It started out making steel tubing and bike parts and has grown to become the 16th-largest automaker in the world.
In 1995 the company racked up $7.3 billion in net sales and sold more than 700,000 vehicles.
Kia hasn't always enjoyed such good fortune.
Seven years of poor management drove the company to the brink of collapse in 1981 before current chairman Kim Sun-Hong took the helm as president.
Kim convinced workers to sacrifice their wages to save the company and rewarded them later with a bonus equal to their salary.
Employees own 12 percent of the company, a fact which Kia says gives workers a personal stake in their product.
Ford and Mazda, who contribute technology to the brand, own 10 percent and 8 percent, respectively. Private investors own the rest of the company.
Recently, labor strikes in South Korea have crippled the country's automakers - including Kia - over the past few weeks and cost nearly $3 billion in lost production and orders, according to Bloomberg Business News.
But the unrest has caused barely a hiccup for Kia dealers and distribution centers in the United States, according to Effler.
The automotive press has given the marque high marks.
In 1995 Popular Science named Sportage ``Best of What's New'' and last year Four Wheeler named it among the ``10 Best Buys in Four Wheel Drive.''
Most customers don't seem to be deterred by the low-profile name, according to Bob Parker, a sales manager with Hall Kia in Virginia Beach.
``The majority of them say `who are they,' '' Parker said, ``But I have yet to have someone get in (a Sephia) that didn't want it.'' ILLUSTRATION: Color photo by MARTIN SMITH-RODDEN, The
Virginian-Pilot
Local Kia franchises include Hall Kia in Virginia Beach...
Color photo
Kia vehicle