Kia has confronted a couple of dicey decisions recently, and it’s made the right call on both counts.
The first one, you might have heard about: suspending sponsorship and advertising from the NBA’s Los Angeles Clippers in the wake of racist comments made by its 80-year-old owner, Donald Sterling. The controversy generated a media firestorm, and Kia wisely pulled out as quickly as possible. It’s since reactivated the sponsorship after the NBA sanctioned Sterling, a spokesman said.
The second call was actually made years ago, but it’s just now coming to fruition: the decision to push ahead with the 2015 Kia K900, a $60,400 luxury car. The sedan is handsome, nicely equipped, and it drives well. It should do for Kia what the Genesis has done for Hyundai—change perceptions about the brand and push it up market.
But importing the rear-wheel drive 2015 Kia K900 was hardly a slam-dunk, and Kia faced a big question: would customers be interested in an expensive luxury sedan that shares space in showrooms with a $14,700 Rio?
Why not? Kia executive vice president of sales and marketing Michael Sprague counters, “It’s breaking into new segments. For us, the arguments [against it] just don’t make sense.”
It’s a fair point. It worked for Hyundai. Conversely, other luxury carmakers are rushing to add smaller, less expensive vehicles to their portfolios. Mercedes-Benz, for example, is anchoring the bottom end of its North American lineup with the $30,825 CLA, which comes in at less than a third of the price of the $93,825 S-class, not to mention the S63 AMG variant, which costs $140,425.
Still, the CLA conveys a sense of Mercedes status, even at a lower price point. Mercedes doesn’t have to convince anyone of the value of the three-pointed star. Kia does have to sell customers on why they should pay premium dollars for a luxury car from a brand with no luxury standing.
For starters, Sprague said Kia is targeting a wide range of buyers—aged 35- to-70-years old—who must be open-minded. In return, Kia is offering a lot of bang for the buck, as the K900 runs a 420-hp V-8 channeled to the rear wheels—which already gives it two qualities Acura can’t claim—and it’s loaded with plenty of standard equipment.
“We knew that to be competitors here—or at least get our foot in the door—there were certain things we were going to have to achieve,” Sprague says.
Kia doesn’t expect to sell boatloads of the K900, but it doesn’t have to. If this car can give Kia a premium shine, it will have accomplished its mission. Conversely, dawdling over dumping the Clippers would have only sandbagged Kia’s momentum in the United States and dented its image.
In two very different situations, Kia made savvy decisions, reinforcing the notion it is a brand to be reckoned with in the United States.