S. Korean Auto Maker Going Ahead With Models for U.S. : Industry: Company is undeterred by recent troubles in U.S. market. It will introduce sedan next fall.
Slumping sales, plant closures and layoffs add up to an unhappy holiday season--and a pretty miserable year overall--for the auto industry in the United States.
But at Kia Motors North America’s office in a glass and concrete industrial complex in Irvine, the word still is go .
South Korea’s second-largest auto maker plans to begin selling a four-door sedan in select U.S. markets late next fall and to follow with a sports utility vehicle early in 1994.
The recent spate of bad news on the auto front, capped last week by Mazda Motor of America’s decision to begin laying off as many as 100 of its 1,250 employees and to offer early retirement packages to an unspecified number of others, hasn’t made a dent in Kia’s confidence in its future here. In fact, the company plans to begin building up its skeleton staff with a hiring program that will begin in December and is likely to draw applicants from among those laid off at Mazda, whose U.S. headquarters is less than a mile away in the same Irvine business complex.
“Our plans are still in place, and we are moving ahead,” said Greg Warner, an auto marketing and product planning specialist hired earlier this year to launch Kia’s U.S. effort as executive vice president and chief operating officer.
In an interview after officials at Mazda Motor of America acknowledged their layoff program last week and Mazda Motor Corp. in Japan reported an 85% drop in first-half earnings, Warner said Kia would not be affected despite its close links with the Japanese automotive concern.
Mazda owns an 8% share of Kia Motors Corp. and supplies the South Korean company with engines and with a variety of design and engineering services. Ford Motor Co., which owns 25% of Mazda, also owns a 10% stake in Kia, which supplies Ford with the Festiva subcompact.
Kia’s own cars in the United States will be based on new designs. Several factory prototypes of the sedan, being called the S-car until an official model name is chosen, are being driven in the United States this year in an exhaustive road test to fine-tune them for the North American market.
Warner won’t say now how many people he will be hiring to fill out Kia North America’s staff. In an interview earlier this year, he said he expected to add about 100 employees during the coming year, beginning with corporate staff and expanding into dealer development specialists as the company starts signing up dealers from the more than 1,000 applications on file.
Warner said that he is not dismayed by the continuing recession and flat auto market in this country and that he expects Kia’s products to do well, in part because of the proposed price range of $8,500 to $10,000--air conditioning and power steering included.
