By on July 11, 2010

If you’re reading this article, that means Fuhrer Schmitt has figured out under what moniker this article should be filed under. As far as I’m concerned it should be a “Question Of The Day”, but it could easily slot into “WTF” and “Wild Arse Rumor Of The Day”. So, here we go…

I was grazing the internet whilst watching “That Mitchell And Webb Look” on DVD when I came across an article by Business Insider entitled “Here Are The 10 Brands That Will Disappear In 2011”. So, I hit the pause button on my DVD player and took a look to see what they predicted. It starts off with names I pretty much suspected would disappear; names like “Reader’s Digest”, “Blockbuster Video” and “Radio Shack” (which I thought HAD already gone). Then, the article starts to get a bit suspect. It starts predicting that “BP” will enter bankruptcy and may even be broken up in order to distance itself from the Deepwater Horizon spill. A prediction which I think won’t come to fruition. However, what really made me double-take was the final brand they predicted will disappear in 2011. Kia.

Business Insider bases the claim on the following evidence.

  • One: That it’s always been a marginal brand (argue that point amongst yourselves) and that coupled with its sister brand, Hyundai, it comes off as a seller of “‘low rent’ cars and SUV’s” (their words, not mine).
  • Two: Because of GM and Ford’s retreat from the multiple branding business model, Hyundai will be keen not to repeat he same mistake.
  • Three: Kia vehicles sell for between $14,000 and $25,000, a price band which Hyundai already caters for. The trouble is Kia sells well in the US market, with their sales up around 15 percent for the year 2010 to date, and no signs of slowing down.

It’s pretty hard to justify closing down a brand (which is selling well), laying off all those dealers and forking out more money to win back customers from Kia to the Hyundai marque. So, I put it to you, is Business Insider orating from deep within their alimentary canal? Or could there be some validity to this theory?

Get the latest TTAC e-Newsletter!

24 Comments on “Question Of The Day: Kia Today, Gone Tomorrow?...”

  • avatar

    It’s simple: Hyundai can’t shut down Kia (whether it would be a good idea or a bad one) since they own less than 40% of Kia. I very much doubt the rest of the shareholders would voluntarily give up their brand and just become a Hyundai manufacturing operation.

  • avatar

    I learn something every day (or try, anyway). Kia started in ’44 making Mazda clones under license. I had to look this up, because I was convinced the picture was a Mazda truck, not a Kia. I was wrong.

    As for the prediction – Business Week is orating from deep within their alimentary canal.

  • avatar

    Dumbest prediction ever. Kia is one of few auto brands in the US which:
    – has introduced a slew of new models which have garnered favorable reviews
    – has been increasing market share and sales
    – actually has an attractive styling language it is spreading across its range
    – is capable of introducing successful new models e.g. Soul. Even mighty Honda can’t say that
    – and has been improving its brand image with customers.

    Kia will be around long after the iPhone dies.

  • avatar

    Business Week is talking out of their asses. The only thing I see happening to Hyundai/Kia is that Hyundai brings Kia closer under the umbrella, adding Kia franchises to Hyundai dealerships and Hyundai franchises to Kia dealerships to make a blanket store for their products. For years Hyundai has been talking about moving Kia further down market and moving themselves further up-market. I could see a business model in which there is a single store in every major metropolitan area selling Equus/Hyundai/Kia. It would be like having (bear with me) Lexus/Buick/Chevrolet dealer.

  • avatar

    Kia is becoming what Scion wanted to be. The only downside is Kia’s current momentum is a smidge faddish and a little shy on the bread and butter vehicles that Hyundai is supplying. I’m not sure if the old Chrysler model of selling “hit” vehicles in succession works over time as a business model.

  • avatar

    Kia’s current North American success, which I think is mostly driven by being a lost cost product during a recession, obscures some problems the brand has.

    A Kia product planner told me that his Korean bosses have completely unrealistic expectations. He told me that the NA staff was shown a concept and they asked the home office guys what kind of sales they hoped for, the answer was 100,000 units. The surprised North Americans replied “For the year or for the life cycle?”.

    Also, though it’s settled down a bit, for a while Kia was running through executives in their US operations. I think they replaced their NA head three times in less than two years, as well as having quick turnover in a bunch of other high positions.

  • avatar
    NTI 987

    First, Business Insider (not Business Week) was not the original source for this article, it was 24/7 Wall St.

    Second, not a chance. Kia is growing in sales and brand equity even faster than Hyundai is in the US. I work for a Hyundai dealer and I’m seeing it happen first hand.

    This is just speculative garbage.

    • 0 avatar
      Cammy Corrigan

      NTI 987,

      Firstly, I can’t believe I wrote “Business Week” in the final sentences! I wrote “Business Insider” all the way through the article, so duly amended.

      Secondly, I’m pretty sure it is speculative rubbish (what’s garbage?). Hence, my opening sentences about filing this one under “WTF”. Kia is growing into a strong brand in the United States. What ticks me off is someone is getting paid far more money than I am, to write about something they really don’t know anything about.

    • 0 avatar
      Dr Strangelove

      “What ticks me off is someone is getting paid far more money than I am, to write about something they really don’t know anything about.”

      You must be rather young then.

    • 0 avatar

      @cammy & NTI

      “speculative garbage.”
      garbage? i wouldnt say so. probably someone wants to
      short-sell KIA stock. make a million trillion here n’ there.

    • 0 avatar

      Hey NTI, nice avatar! ;-)

    • 0 avatar

      I’m on the verge of buying some Kia and Hyundai stock, even though they’re sold only on the S. Korea stock market. Anyway, you’ve seen what I see? Kia encroaching on Hyundai? I wonder how this will play out.

  • avatar
    Steven Lang

    I know a lot of electronic firms that would ‘kill’ to have the Radio Shack brand name for their online site.

    Blockbuster also has a lot of brand recognition. Albeit the company itself has been struggling for close to ten years.

    ‘Auto’ Brands that could go away from the NA market in 2011?

    A few of the higher end brands…
    Chrysler brand (perhaps in 2012 or 2013)

    I think Saab will make it through 2011. Sometimes I wish Ford had sold Lincoln and kept Volvo instead. Most folks under 50 still see a Lincoln as a dinosaur of a vehicle driven by a stodgy old man.

    Scion can work. Toyota does have a huge problem with the conservative orientation of their models. I would love the upcoming Toyobaru vehicle be called a Scion Celica and have them finally give up all the pointless acronyms.

    A Scion Supra wouldn’t hurt either. Have two sporty cars and an Xb styled vehicle with the current powertrain. I know a lot folks out there love the design of the first generation.

    • 0 avatar

      … Most folks under 50 still see a Lincoln as a dinosaur of a vehicle driven by a stodgy old man.

      And those of us over 50 see Lincolns as a gussied up Ford when what we’d really like from Lincoln is a big dinosaur for our stodgy old selves to cruise around in.

    • 0 avatar

      Tandy has reinvented Radio Shack a few times. There’s a store around the corner from my house that was one of their first few hundred stores, and it’s gone through a few iterations. Right now it seems as though their big focus is cell phones and service. Either way, the brand has some equity and I doubt, as the Business Insider put it, that Radio Shack is a “damaged brand” relative to Best Buy.

      Blockbuster should buy NetFlix, you’re right about the brand’s value for online commerce.

    • 0 avatar

      “I think Saab will make it through 2011. Sometimes I wish Ford had sold Lincoln and kept Volvo instead. Most folks under 50 still see a Lincoln as a dinosaur of a vehicle driven by a stodgy old man.”

      I could see Lincoln succeeding in China if the tech focus and American luxury brand values were left intact. Definitely, product would have to evolve for that market but I bet Navigator, MKZ, and MKS would succeed in a retail sense. Towncar/panther body tooling could probably be marketed somehow there, too.

      The problem is that Ford has too much overlap with Volvo. And if you doubt that, it’s because it has very little to do with the past and much to do with the future. They’re marketing against them in several sedan and suv classes, have a better evolved “green” product line and marketing presence, not to mention the focus on safety, and last, Ford will most assuredly become more similar to Volvo in regard to what works bost for each brand. Result: Ford mass markets successfuly, Volvos become dressed up Fords, sort of what Lincoln is now but with different design language and without the geezer market language (not counting Town Car)…and then the execs say why the smurfing crap did we kill Mercury just to replace it with up-market Fords called Volvos.

      Platform sharing happened across all of those brands. Usually when brands who share platforms split up, it’s for a reason. Volvo will to better in China than Lincoln. China is where the growth is and America is where the growth doesn’t seem to be.

  • avatar

    Damnit. I was about to e-mail Bertel about this article. I had a good laugh when I read it on Yahoo (which links to the original on 24/7 Wall St.).

    Simply… a brand which sells so well in both the North American market and globally (who are we kidding… it outsells both Mitsubishi and Mazda) is in absolutely no danger of dying off.

    While there is (and has always been) some uncomfortable overlap between Hyundai and Kia products (the previous generation Tucson and Sportage were the Korean version of the Escape-Tribute twins), there’s enough brand separation and market volume for them to keep running both with no problem.

  • avatar

    How would it even be financially possible for Kia to be gone in 2011? They just introduced cars like the Forte and Forte Koup…wouldn’t those newest cars at least have to run their life-cycles?

    I agree this is just crap spouted by people who don’t really know. And, if Kia goes away before I get to buy a brand new Soul, I’ll be very angry.

  • avatar

    I saw the same ridiculous article on Yahoo (or was it USA TODAY?). Kia has tons of fresh new product. They are nothing like chrysler.
    I think Kia in the USA is just coming into it’s own identity. They’ll be around a long time…the article was written out of someone’s
    ( _ @ _ )

  • avatar
    Amendment X

    Kia isn’t the laughing stock of the auto world that they once were. Decent, cheap vehicles are their specialty and they fulfill the promise.

    They will ride Hyundai’s coattails until Hyundai becomes the #1 automaker in 5 years, and then buy off the Hyundai stake and become completely independent.

    Honestly, it’s hard to rail on specific brands anymore for being crappy. Even non-gearheads laugh when you make a Kia or Hyundai joke, but truth is, these carmakers aren’t crappy anymore. No fun :(

    Every country has its shot at #1. The Koreans are moving into place now for this particular industry as they are overtaking Japan, and after that will be the Chinese and Indians at first place. Who follows them is anyone’s guess.

  • avatar

    I read that article, as well. The Kia section struck me as stating, “We think this brand will disappear. Here are a bunch of reasons why we’re really off with this one.” The only way I could see it is if Hyundai decides the two brands are cannibalizing each other too much, want a simpler brand strategy and decide Kia has too much baggage from the cars they made in the past. The amount of marketing effort that’s gone into Kia definitely doesn’t seem like Hyundai plans to phase it out, however.

    What really surprised me in that article was the T-Mobile prediction, especially the statement that the US can only really support two wireless carriers. Really? I’m sure I’m missing a lot, but how can a service that is practically considered mandatory for a pretty sizable chunk of the US population only support two companies? The only way I can see that is the cost of a wireless infrastructure being so high, but I’m way off the subject matter of this site.

  • avatar
    George B

    I vote for Business Insider is orating from deep within their alimentary canal. Kia has new attractively priced product to sell and their styling is inoffensive. Missing piece, a competitive midsize, is being filled by a new Optima this fall. I believe that Chrysler, Dodge, Mitsubishi, and Lincoln are car brands more likely to disappear than Kia. Kia’s growth probably means Dodge can’t help Chrysler Corp. meet Marchionne’s minimum sales volume.

  • avatar

    Kia’s vehicles are not just badge-engineered Hyundais, although they do share many components.

    Interestingly, the Hyundai Entourage minivan was such a product (a clone of its Kia Sedona sibling), and Hyundai wisely killed the Entourage in favor of the Sedona.

    As a new Sedona owner, I’d say it more than holds its own against the competition from Chrysler or Toyota. There would be no reason to kill Kia on account of its minivan, anyway.

  • avatar

    Kia? No way. Radio Shack? Probably not (where else are we going to go to get our blank VHS tapes, and CB antennas?:). Blockbuster-without a doubt; it assumed room temperature long ago and Netflix, Redbox, Hulu, and others have been digging Blockbuster’s hole for a year or so.

Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • rudiger: I’m with Syke. In fact, could be good opportunity to pick up an older, used Bolt with a brand-new...
  • ToolGuy: This is a good writeup on some bad legislation, with some thoughtful comments❗ Does this site still exist?
  • ajla: Seems like Acura missed the mark with the new TLX. Neither the 2.0T nor the Type-S are quick enough to draw in...
  • VWGolfGuy: The ancient Q50 is the better buy in the sort of sport luxury market
  • Arthur Dailey: I have yet to have had to pay when returning a leased vehicle, unless for body damage. And I have...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber