Kia Motors plans to double U.S. sales by 2010, improve quality

September 13, 2002

Detroit -- Bloomberg News reports that Kia Motors Corp. expects to double its annual U.S. sales to about 500,000 vehicles in 2010, partly by reversing consumers' perception that South Korean vehicles aren't well built.

South Korea's second-largest automaker created a U.S.-based engineering team on Sept. 1 focused on reducing vehicle defects to the industry average, Peter Butterfield, chief operating officer of Kia's U.S. unit, told reporters in Detroit. Kia is tying employee bonuses to quality goals, he said.

Kia must overcome the same reputation as makers of "trash" cars that haunted Japanese automakers 30 years ago to match the success of Honda Motor Co. and Toyota Motor Corp., he said. The company is the 10th-biggest seller of autos in the U.S. General Motors Corp., the world's biggest automaker, sold 486,078 cars and light trucks in the U.S. in August.

Kia placed last among automakers in an annual initial quality study by J.D. Power & Associates for the 2001 model year. In the study, Kia vehicle owners reported 212 defects per 100 vehicles, down 21 percent from the year earlier. Kia still had more defects than the industry average of 133 per 100 vehicles.

"Quality counts, but it isn't the only factor," said Michael Schmall, managing partner at Planning Edge, a provider of forecasts for automakers and suppliers. "There's no question Kia's sales will go up as they expand their lineup and add dealers."

Kia sold 167,840 vehicles in the U.S. this year through August, up 16 percent from the same time last year. The company is on track to sell at least 250,000 vehicles for 2002 and expects to increase annual sales to 500,000 by 2010.

Sales growth will depend on products such as the new Sorrento sport-utility vehicle, which goes on sale next week, and the addition of more stand-alone dealerships, Butterfield said.