By on September 6, 2010

When Renault and Nissan signed an agreement to form an alliance, few expected it to work. In fact, according to the book “Shift” (or was it “Turn Around”?), Bob Lutz was quoted as saying that Renault would be better off taking the money they spent on the Nissan stake, putting it on a ship, sailing it into the middle of the ocean and sinking it. Another accurate prediction from the One of Maximum Bullsh*t. The reason that the Renault-Nissan has worked so well so far is, according to Carlos Ghosn, communication. Without communication, how can you expect your partner to understand you? Sounds simple, right? Not to Hyundai and Kia.

While checking on the local Alabama news, I came across this article by the Montgomery Advertiser. Alabama is home to a Hyundai plant. The article details the handover of Santa Fe production from Hyundai’s plant in Alabama to Kia’s one in Georgia. The plants are less than 100 miles apart and they already supply each other with engines and (soon) transmissions, so you’d expect this transfer of production to be a piece of Alabama Mud Cake? Not really.

When Kia announced it would be making the Kia Sorento, a CUV which shared the same platform as the Santa Fe and looked very similar to each other, it pretty much put it beyond reasonable doubt that production of the Santa Fe would move to Georgia. Kia drafted up a four-paragraph press release about the plans. A copy went to Robert Burns, a spokesperson for Hyundai Motor Manufacturing. Then the communications problems started.

The press release was embargoed until 8am on a Tuesday. Corrine Hodges, a spokesperson for the Kia plant in Georgia, refused to talk about the press release and wouldn’t even acknowledge the press release’s existence. This sounds like normal behavior for a PR person, until you realize that Ms Hodges was acting like this AFTER the embargo had expired. Why was she denying a press release after it was OK to publish?

On the same day, Mr Burns confirmed the press release and the contents, but still wouldn’t release it until there was no confusion over the matter. Then the Montgomery Advertiser got involved.

The Montgomery Advertiser got ready to publish the information on the press release and it not being issued, just yet, on the internet. Mr Burns had agreed to be a named source in the story…right up until the story was about to be published. Before the story went live, the Montgomery Advertiser received a phone call from Mr Burns stating that he didn’t want to be considered the named source of the story. Two hours later, Mr Burns phoned back allowing the story to be published as he got permission from “higher-ups” to release the story. But he still didn’t make public the press release from Kia.

The article then states that “Hodges sent the release, clearly marked with an embargo date and time, to Burns, but didn’t call him back to recall the whole thing. She, or someone at Kia, shared the release with others in Montgomery and likely elsewhere, but didn’t let them know to hold it.” Sounds like a bit of a clusterNSFW ? Well, there may be a reason behind this.

It seems that in the US operations of Hyundai and Kia, neither plant share any bosses. They’re two independent entities. Kia doesn’t report to Hyundai and vice versa. You have to go all the way to South Korea, before a merging in management happens. Now, I don’t wish to illogically extrapolate from this one incident, but could this lack of communication have ramifications further down the line? I mean Old GM’s brands didn’t really communicate with each other and an aloof management at Toyota brought about its current problems. Whereas at Ford, Alan Mulally got departments talking and communicating with each other. Which allows them to work together better. I’m sure Hyundai and Kia will address this problem. Unless they speak some Korean dialects that are mutually unintelligible.

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13 Comments on “Hyundai and Kia. Have You Met Each Other Before?...”

  • avatar
    Educator(of teachers)Dan

    Hopefully Hyundai and Kia are able to realize the stupidity of this arrangement in the states.  Only the wisest and stupidest of men never change.

    • 0 avatar

      But with Hyundai owning less than 40% of Kia at the corporate level it’s not surprising that the US operations aren’t fully coordinated.  Kia isn’t just a subsidiary …

  • avatar

    Hyundai owns part of Kia, but not all of it. Which is why you see the obvious lack of product coordination and overlap. Kia basically is like Hyundai’s younger brother, getting Hyundai’s hand me down chassis, powertrains etc, then mixes and matches the parts to come up with the Kias. It seems like Hyundai comes up witha design, then hands it off to Kis, which then puts its own spin on it. That’s why Kias always seem to be a 1/2 step behind or ahead of the similar Hyundai. Kia improves on the Hyundai design (which is why the Sorento has push button start and a panoramic sunroof but the similar Santa Fe does not), but then a couple of years later Hyundai comes out with a new design and Kia is behind again.

    • 0 avatar

      The hand-me-down is not the whole story. Before hand-me-down, KIA products were much worse than Hundai’s. I remember a neighbour with a rustmobile Sportage only too well. That thing basically never ran. These days they are about the same, but KIA still costs 2/3 of Hundai. This eats into Hundai’s sales badly, but since Hundai does not own whole KIA, it only gets a quarter of the (already reduced) profit. To say that Hundai hates KIA is probably too mild, I’m sure. But they cannot extricate themselves from this brotherhood.

    • 0 avatar

      We never have people cross shopping Hyundai vs Kia. Kia still seems to have a much lower brand image. Still, it’s irritating to see Sportages on every truck that drops off new cars when we can’t get allocated a Tucson to save our lives.

  • avatar

    You think that’s bad? In Brazil Kia and Hyundai are at marketing war, with full-page Hyundai ads on newspapers calling Kia their “value, cheap brand”. It all started when Hyundai started spreading ads saying they’re now “the world’s third biggest automaker”, and Kia responded that those numbers include their brand. Source (in portuguese):

  • avatar

    Now, I don’t wish to illogically extrapolate from this one incident, but could this lack of communication have ramifications further down the line?

    It has ramifications now.  Hyundai and Kia are there own worst competitors, and the parent doesn’t seem to have a good idea which brand is going to do what.  In theory, Kia should be the “youth and sport” brand, while Hyundai’s the competent mainstreamer.  But you see weird exceptions like the Genesis Coupe, Accent 3-door, Elantra Touring and (possibly) the Tucson, which would make better Kias; on the other hand, you have the Amanti and Borrego, which would make more sense as Hyundai models.  Finally, there’s a few models that essentially compete with each other: Accent/Rio, Magentis/Sonata and my favourite, the Entourage and Sedona.

    They seem to be getting smarter, but not quickly.

    • 0 avatar

      Having a ‘youth and sport’ brand along side a mainstream brand hasn’t really worked for anyone yet.  Pontiac couldn’t find it’s place next to Chevy, Scion can’t seem to establish a foothold next to Toyota, and VW can’t seem to figure out what to do about Seat.
      That being said, right now both Kia and Hyundai have small enough total volumes that I doubt they are stepping on each others toes too much.  If I were Hyundai upper management though, I’d take a close look and think about investing more into the Kia side of the company.  Kia has just pulled off what might be the single greatest model over model styling update in the history of the auto industry.  Peter Schreyer should be at the top of the headhunting list for Acura and any other company struggling to find a cohesive and attractive design language.
      I can’t think of a single Hyundai model with a Kia equivalent that I would chose over the Kia right now.  The new upcoming Optima especially is brilliant, especially in the interior.  With the turbo-4 it could easily snap up every orphaned Saab enthusiast on the market.

    • 0 avatar

      It’s not so much about Kia becoming the next Scion, but Kia not having the same cars in it’s showroom that Hyundai has.  Or, to put it this way, if a significant chunk of your buyers are trying to decide between the Rio and Accent or Magentis and Sonata, you’ve lost.
      Maybe it’s different in the US, but in Canada both brands are their own toughest competition.
      A few simple steps would probably remedy this: kill the Accent hatch and the Rio sedan.  Send the Borrego packing to Hyundai in exchange for a Sportage and Sorrento that aren’t reskins.  Don’t even think about another Tiburon or Amanti (which hurts, given how nice the Cadenza looks) and, while you’re at it, re-schnozz the Genesis coupe and kick it over.

  • avatar

    Kia is a dead brand here in NYC suburbia. Their last dealership actually boasted about being the only Kia dealership in Westchester. Now the only place to get parts for one is in the Bronx.

  • avatar

    It is premature to judge Hyundai/Kia as another GM-esque badge-engineering blunder.  The companies are just hitting their stride, throwing a lot of new product on the market to learn what works and what doesn’t.
    What used to be two bottom-feeder companies with no symbiosis is quickly becoming Youthful (Kia) and Aspirational (Hyundai).  Give them 5 more years and the line in the sand should become a lot clearer.

  • avatar
    Mr Carpenter

    Hyundai executives are pretty smart.  Their smartest future move, would be to take a huge boatload of money, buy the remaining 60% of Kia, morph it into Hyundai, and kill the Kia brand off entirely. 

  • avatar

    Youth and sport brand… I always thought that that was what Mazda was compared to Ford. With their platform sharing three-way with Volvo, Ford and Mazda both got excellent cars. Mazda made them sporty, Ford made them classy, they both sold decently. Mazda isn’t doing so well right now… but then, it seemed like a good idea at the time.
    Maybe the “youthful and sporty” tag fits Kia… they used to sell rebadged Mazdas and cars with Mazda engines (which is likely why the old Sportage sucked so badly…). Though that doesn’t explain Hyundai, which sold rebadged Mitsubishis… which were even worse…
    I agree with don1967, the delineation between the brands is still developing. Give Hyundai a few more years to move upmarket and the separation will be clearer.
    But I have a strange feeling that Kia’s taking volume from Hyundai may be less about the lack of definition and more about Hyundai moving too far upmarket too quickly…

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