DETROIT (Reuters) - Kia Motors Corp (000270.KS) is out to change its image among Americans as a low-priced value brand with the recently launched $66,000 luxury K900 sedan, but analysts said it should expect an uphill climb.
Kia, the South Korean automaker with the same corporate parent as Hyundai Motor Co (005380.KS), has been asking U.S. consumers to “challenge the luxury you know” since its February Super Bowl ad featuring Laurence Fishburne who reprised his role in the futuristic “The Matrix” movie trilogy.
“What we hope this will do is send a signal to consumers that we are a different brand from what they thought we were a few years ago,” said Michael Sprague, Kia’s U.S. executive vice president for sales and marketing.
Sprague spoke at an Automotive Press Association event in Detroit on Thursday.
Kia’s next-most expensive model is the Cadenza sedan at about $36,000. Sprague said Kia positioned the K900 between the BMW (BMWG.DE) 5-Series, which costs just over $50,000, and the BMW 7-Series at about $75,000.
Jack Nerad, executive market analyst for industry consultant Kelley Blue Book, said he is not sure the K900 makes as much sense in the U.S. market as the South Korean version of the car, called the K9, does in its corporate home.
“It’s a good luxury car,” said Nerad, who noted that at the K900’s price, “people are buying as much for the prestige of the brand as they are for the actual hardware, and I think that’s where Kia will have some difficulty versus Mercedes-Benz or BMW or Audi.”
Kia has been successful selling mostly low-priced models. When the U.S. auto industry experienced a downturn in 2009 and 2010, Kia sales rocketed up as consumers searched for value. Last year’s U.S. sales of 535,179 was 96 percent higher than Kia’s 2008 sales.
It is too early to say if the K900 will be a U.S. success. It has yet to be introduced throughout the United States and sales totaled 365 in March and April, its first two months on the market.
It has, though, already served as a magnet by bringing shoppers to Kia’s 765 U.S. showrooms who then look at the brand’s 11 product offerings, Sprague said.
Kia as a brand still has a way to go in reliability ratings, said Jake Fisher, director of auto testing at the influential U.S. magazine Consumer Reports.
Consumer Reports has not yet fully tested the K900, but Fisher said the one he drove was “disappointing.”
“I don’t understand why you would pay such a premium for a K900 over a (Hyundai) Genesis,” said Fisher.
The Genesis is sold at about half the price of the K900.
Reporting by Bernie Woodall; Editing by Lisa Shumaker