Forgive the alliteration, but Korean automaker Kia (000270.KS) is killing it.
New models like the Sorento crossover, K4 sedan, and, of course, the ubiquitous Telluride three-row SUV are everywhere, it seems. And then there are the electric EV6 and EV9.
Those vehicles led Kia to smash sales expectations again, with September US sales hitting a record 65,000 units sold, an 11% jump from a year ago, with full third quarter sales climbing 9% to another record high.
“We had a great September, and you know, it’s really been every month of this year, our sales are building,” Kia America vice president of sales Eric Watson told Yahoo Finance. “We’re up almost 9%, up 8.9% year to date. So we continue to build strength every single month.”
This year has been huge for Kia. But the Korean automaker’s story in the US began long before that.
Kia is South Korea’s second-largest automaker, behind sister company Hyundai. (The two merged in the late 1990s.) Kia entered the US market in 1993, offering vehicles like the Sephia and Sportage SUV, a nameplate that still exists today. But the brand struggled initially, with US customers eyeing the brand skeptically. Its image: a cut-rate, budget automaker.
To give buyers peace of mind, Kia instituted policies such as offering a 10-year/100,000-mile powertrain warranty, unheard-of at the time. Kia sales improved over the years, and in November 2009, the company opened its first US assembly plant in Georgia.
The company still had a scrappy image. Funny advertisements, like Kia’s “Black Sheep” rapping hamsters promoting the Kia Soul in 2010, added to the quirky nature of the brand.
But cars like the real-deal Kia Stinger GT, a BMW-rivaling sports car that debuted in 2017, gave the brand a shot in the arm as a legitimate automaker. “2 Dudes in a Car” co-host Rick Newman and I gave the car a glowing review.
The Stinger brought Kia much-needed performance kudos. Updated marketing and branding, along with deep connections with sports leagues like the NBA, made Kia popular among younger, more urban consumers.
But one vehicle really put the brand on the map.
“The Telluride was a huge piece of redefining who we were as a brand and attracting a different type of customer,” Watson said, “and I think one of the big aha moments for me.”
The Telluride offers an attractive, rugged three-row SUV package with a comfortable (even upscale premium) interior, along with all-wheel drive capability, that still starts at just under $37,000 — a very good deal in this automotive landscape.
And this meant customers who traditionally shunned Kia were buying the Telluride.
“As you drive around middle-class and upper-middle-class neighborhoods around the country, you start to see Telluride as one of the two vehicles in their driveway or their garage, and it really allowed families to accept the Kia brand,” Watson said. “And we’ve seen a growth in the ‘share of garage.’ So, if they bought a Telluride, perhaps the next car they replace in their driveway also becomes a Kia. That it really opened people’s minds to what Kia is and what we could become in the future.”
Watson noted that around that time, in the early 2020s, Kia’s logo and brand identity changed, which coincided with dealership upgrades. In a very short period, about 60% of Kia’s dealer network built new facilities and expanded service capacity.
This built Kia’s momentum in the US, according to Watson. And the all-electric EV9 — think of it as an EV version of the Telluride that looks kind of like a Range Rover — is seeing sales gains too (and a positive ‘2 Dudes’ review).
The road ahead: Kia is well-positioned, especially with EVs like the EV9 and sportier EV6. (Hybrid and gas-powered cars are still a big part of Kia’s present.) That and building more vehicles at its Georgia plant as a way to blunt President Trump’s ongoing trade war also helps.
But the Kia story is not without some speed bumps.
In addition to building more in the US to reduce costs, the company has set up its assembly plants in nonunion states where labor costs are lower. This, in turn, means cheaper production costs and lower MSRPs at the dealership.
The Trump White House is no backer of unionized labor, just so long as the jobs are in the US. But a raid at the Kia/Hyundai facility was a black eye the government didn’t need as it pursues more US factory jobs, and it will lead to a delay in opening the Korean automaker’s battery site there.
Another issue that Kia faced was the so-called “Kia Challenge,” where people posted videos on how to steal pre-2021 Kia and Hyundai cars due to a vulnerability, resulting in theft rates rocketing higher. A software update helped deter future thefts, but the company was on the hook for a $200 million settlement after owners sued.
Despite the recent hiccups, Kia’s Watson sees continued growth for Kia in the US.
Watson noted that Kia’s production facilities are capable of building gas-powered cars, EVs, and hybrid vehicles interchangeably to meet customer demand.
Watson said to expect a new products in the coming months, with one of them being an all-new Telluride, which he said will take the brand to “new heights” — a bold claim given how much Kia has already grown.
Globally for the year, Kia aims to increase total shipments by 4.1% to 3.22 million units, with revenue climbing 4.7%, the company said at its investor day earlier this year. A big part of that is the US, where the company plans to increase US market share to over 6%, from the current 5.1%, with sales rising 7% year over year.
In addition to sales growth stemming from the new Telluride, Kia aims to introduce a new EV pickup truck to North America, one that the company expects to sell 90,000 units a year when fully ramped up.
The company has come a long way from its budget automaker days.
