Vision21: Kia’s Path for the Decade

Almost everybody has a Kia Pride experience. Compact, remarkably roomy for its size, decently powered, and above all, inexpensive to own and maintain, the Pride is Kia Motor’s watershed automobile. For what it lacked in prestige, it made up for in sheer volume as far as Kia is concerned. Conceived in 1986, a time when People Power was born and David Hasselhoff was actually primetime material, the Pride was part of the then fledgling automaker’s "Maple Project", an ambitious plan to develop their overseas business. For while Kia had started out in the bicycle business back in 1944, evolved into motorcycles by 1961, then four-wheel trucks by 1971, and then licensed production of the Peugeot 604 and Fiat 132 sedans eight years later, it had yet to produce a passenger car that would establish its name in the global marketplace.

In partnership with Ford Motor Company and Mazda, Kia’s first subcompact was unveiled in January 1987 as the Kia Pride/Ford Festiva/Mazda 121. Over 60,000 units were produced at Kia’s Sohari plant in only its first year. By 2001, by which time the Pride was already showing its age quite clearly, annual production amounted to 120,000. More than two million Prides have been manufactured since the first unit rolled off the Sohari assembly line 17 years ago, which speaks volumes about how well the simple formula for a low cost what-you-see-is-what-you-get product worked to get the relatively unknown car company into the big leagues.

But joining dealers and distributors from around the world along with Columbian Autocar’s Dealer Operations Manager Chut Velasquez and C! Magazine’s Tito Hermoso for the 60th anniversary of Kia though, one gets the impression that they’d rather you didn’t dwell on the Pride too much when thinking of their company. Because it’s one thing to be known as a car company, and it’s entirely another task to be known as a great one.

For the first decade of the 21st century, the Korean giant has set its sights on being among the Top 5 automakers by 2010, hence the "21" in their title for this year’s anniversary celebration. And to be in the Top 5 — which means being in the company of giants like Toyota and Volkswagen — means Kia has to sell automobiles that rate among the best when it comes to quality, performance, value, and market relevance. Almost three million annually by 2010, in fact.

With a packed schedule of plant visits, presentations, and for-our-eyes-only sneak peeks at up and coming products, Vision21 was a weeklong tour that showed guests its road map to 2010. Three objectives were outlined: bring product quality up to the industry average, firm up its image as a "fun and exciting" brand for younger markets, and increase sales to nearly three million by 2010. During the 1997 Asian financial crisis, Kia became insolvent from the weight of its investments and was taken over by Hyundai Motors a year later. Cleaning up the house, Kia became profitable once more after just one year, and the formation of the Hyundai Automotive Group in 2000 saw both companies begin to benefit from synergies in research and servicing. With the two companies having access to each other’s facilities, research, and product platforms, it’s important for both to have clearly distinct brand identities while maximizing each other’s assets. Hyundai, in general, will have a more mature, higher-end market, and you can see that with products like the XG sedan and Terracan SUV. Kia, meanwhile, will be for the young and sporty crowd with cars like the Carens and Sorento, endorsed by no less than tennis great Andre Agassi.

One of the group’s key assets is the Namyang Research and Development Center, an operational hub in the group’s total of six R & D centers around the world. Ranked among the top ten automotive R & D facilities in the world, it covers real estate of over 3.3 million square meters. Facilities include a crash test area, a sound chamber, a banked oval, and a wind tunnel with an engine three storeys high and generating more than a thousand horsepower. Heavily disguised "mules" and competitors’ cars are tested year round, and one lot is a depository for dozens of vehicles (Kias, Hyundais, and competitors’ comparative models) crashed in every possible way to test their safety engineering.

It’s at R&D centers like these that the company is developing future-oriented technologies such as hybrid electric propulsion, hydrogen fuel, telematics, and swoopy designs for prestigious international motor shows. The KCV-III concept car, for example, is a bulbous coupe/convertible with strong European styling cues. It plays to the tastes of "Generation Y" which ranks Kia in the US as the most popular brand. The KCV-IV Mojave, on the other hand, is a midsize pick-up featuring a forward-thinking cabin and meant to capitalize on the truck-hungry US market. If the US is ready for a meat-and-potatoes truck from the erstwhile car and small SUV-focused Korean brand, the Mojave may roll out before the end of the decade. Advanced technologies also enable the engineers and designers to computer-design full-scale 3D models much faster than building mock-ups, saving on time and money while allowing more leeway in computerized trial-and-error before moving on to full-size, physical mock-ups.

It’s only lately that Kia has made a name for itself in the international market as a serious automaker, with key products that can compete against the world’s best in lucrative genres. While the roads and highways of Seoul are populated with thousands and thousands of Kias, Hyundais, Daewoos, and Ssangyongs (foreign automobiles are taxed very high to promote the local industry), international sales account for 60 percent of Kia’s production capacity. That’s nearly 600,000 vehicles sold in markets such as Norway, South Africa, China, and Latin America. The US market alone accounts for almost 50 percent of the company’s exports, while Europe and Canada account for most of the remaining 50 percent.

Products for export, therefore, are vital to Kia’s bottom line and must satisfy varied tastes and preferences around the world. Two notable examples are initiatives on proven formulae with relatively high profit margins: the minivan and the Sport Utility Vehicle, both extremely popular in developed countries. The Carnival/Sedona minivan — in only the first generation for the basic platform — has garnered praise here and around the world for its balance of affordability, performance, and spaciousness. The Sorento premium SUV, on the other hand, is a wildly successful product that’s won accolades not only for offering a similar balance of virtues but for markedly improved build quality and refinement as well.

A trip to the Hwasung plant erases any doubt that the Sorento is a fluke. It’s a rainy day when we visit. All one can see from the balcony of the executive lounge building is acres of blue factory roofs, but it’s eerily quiet. Yet at the assembly lines, an army of robots assembles thousands of Optimas, Spectras and Sorentos for domestic and international consumption. The only sounds are the presses churning out the basic sheet metal for the cars and the short, crisp bursts of welding, stamping, and gluing that the robot arms tirelessly perform during the day. Human workers perform the finishing touches on the cars such as attaching trim and seats, and they go about their tasks with relaxed efficiency. On one end of the factory are the presses, and the finished cars and SUVs roll out at the other end for inspection and testing. Hwasung produces 600,000 units a year, but cumulative production at the plant since it opened in 1991 passed the three million mark last year.

Hwasung is also the home of the Opirus, a Honda Accord-sized luxury sedan that’s a mix of Mercedes-Benz E-Class, Jaguar S-type, and Lincoln Town Car styling cues. It’s a popular car in Seoul where the majority of well-to-do citizens and executives go about their business in the Opirus, the Hyundai XG, and SM 520 (our Nissan Cefiro) in the predominant colors of black, white, or gray. I suspect the Opirus’ luxury positioning probably won’t work in the affluent US and European markets, which would only appreciate its in-your-face looks if it wore a propeller or three-pointed star on the grille. Still, it’s a symbol of Kia’s arrival as a serious player. Although it’s in contrast to their positioning as the more affordable brand in the Hyundai-Kia group (the Opirus and Sorento were conceived before definitive brand strategies were set), the Opirus tells the world that Kia can now make a luxury car for global consumption if it wants to. Gone are the days when it was known for only having the know-how to make inexpensive cars. Indeed, products like the Sorento and Sedona have done much to improve Kia’s image in the US and Europe.

Meanwhile, the upcoming Picanto hatchback is something that everyone in our group gets excited about, and it’s the long-awaited successor to the Pride. Charmingly chunky and bestowed with such modern conveniences like electronic fuel injection, power steering, and multireflector headlamps, the Picanto is Kia’s entry-level "world car". In line with Kia’s positioning as a "young and exciting" brand, the Picanto will be available in a wide variety of colors and supported by chic advertising campaigns. Much as the Pride was produced and sold around the world in only a few variations, the Picanto will be marketed likewise, albeit in an increasingly sophisticated export market. The Picanto, said Columbian’s Chut Velasquez, should be locally available within the next few months as a contemporary rebirth of the "people’s car". And while the new people’s car may be affordable, it promises a better ownership experience with world-class quality and modern technology under its skin. With such impressive automobiles on the production line and even more in the pipeline, Kia’s vision seems very much achievable.