Kia Motors America plans to add about a half-dozen stores this year and likely will add more later to keep pace with its U.S. growth, the brand’s top sales executive told dealers last week. The Korean automaker also is taking a hard look at bringing its flagship K9 sedan to the U.S. market to bolster the brand’s lineup on the premium end, said Tom Loveless, Kia’s vice president of sales, speaking at the American International Automobile Dealers Association meeting here.
“The Kia K9 is certainly a possibility,” Loveless said. “It’s probably not going to happen in the next 12 months. But it’s something we’re looking long and hard at.”
As Kia seeks to increase its U.S. business, the brand will have to expand into new segments, he said, and the K9 could help fill a gap in the marketplace for premium cars priced in the $40,000 to $50,000 range.
“If you look at the graph of all the cars that are bought in the United States, it kind of drops off like a cliff when you get past $40,000,” Loveless said. “And from $50,000 and beyond there is a bubble again, which is the traditional luxury brands.”
Kia has no major launches planned this year, but its U.S. sales were up 22 percent through April to 185,610 vehicles. In 2011, Kia sold 485,492 vehicles, a 36 percent increase over 2010. Loveless said Kia expects May to be another record-breaking sales month — its 21st consecutive one. But planning for such growth has been a challenge, he added.
The company is building vehicles at capacity, Loveless said, and it is still struggling to keep them in stock. To add volume, Kia invested $100 million last year to expand capacity at its West Point, Ga., plant to 360,000 units a year, up from 300,000. Earlier this year, Kia pledged to get its dealers 100,000 more vehicles this year.
When asked whether Kia’s dealers are profitable, Loveless responded with a definite yes. But the brand also needs more stores, he added. The brand has about 760 dealerships now, but if U.S. industry sales continue to climb, Loveless said “we’re probably a dealer network of about 800.”
Even with Kia vehicles in short supply, the brand plans to add about a half-dozen stores this year across the country. Loveless declined to say where exactly but said there are markets such as the Los Angeles area that could use more stores. He said: “There are some strategic markets where it makes sense.”