The headline of this post refers to an article that appeared on the 24/7 Wall St. blog back on June 15th, 2011. The post theorized that Hyundai would kill the Kia brand by the end of 2011. The blog post also went on to say that Readers Digest, Dollar Thrifty, Zale, Blockbuster, T-Mobile, BP, RadioShack, Merrill Lynch, and Moody’s were likely to be gone in the same time-frame.
The folks over at 24/7 Wall St. seem to think Kia is similar to the failed nameplates over at General Motors, Ford, and Chrysler. The only basis of this prediction is that Hyundai management will finally realize it’s expensive to maintain multiple brands and dump the weakest brand, Kia. All I can say is, that’s it, that’s all you’ve got!
They only gave one reason the brand might go away so let me mention a few things that might lead one to think Kia plans on sticking around.
1. Hyundai owns around 39% of Kia. That’s a nice piece of the action but hardly a majority.
2. Kia just opened a new manufacturing plant in Georgia to the tune of over a 1 billion dollars.
3. Kia has increased it’s market share in the US for 15 years in a row. When was the last time Pontiac or Mercury could claim that?
4. Kia sales are up more than 22% over the last 12 months and Q1 profits were up 50%.
5. Kia has just added new models that are fueling it’s growth and has several more coming to market in the next 12 months.
I agree Hyundai and Kia need to be careful going forward. A strategy to further differentiate the brands is crucial if both manufacturers are to maintain sales growth. The good news, in my opinion, Kia is already well beyond the comparisons to cookie-cutter brands like Pontiac, Mercury, and Plymouth.
Love ‘em or hate ‘em, Kia is a strong brand with high quality and value that has many other car manufacturers scratching their heads. Kia has earned a loyal base of customers and respect in the industry, it’s going to take more than a vague blog post to stall these guys out.
CarManDan
Dan Anderson
Kia of Moorhead and Fargo
