Kia Expecting a Sales Rebound in U.S. Market
The operation rate of Kia Motors' plant in Georgia, the United States, has exceeded 80 percent. Full-scale production of the Telluride, a large sport utility vehicle (SUV) model, has boosted the plant's operation from 70 percent last year. The North American automobile market is expected to grow negatively this year, but Kia Motors is expecting a recovery in sales.
In May, automobile sales of the Georgia plant grew by about 1,000 cars to 23,900 vehicles from 22,905 in April, Kia Motors said. The plant’s annual production capacity is estimated at 340,000 units, which means 28,300 units per month. The plant's operation rate is estimated to have topped 80 percent in May. Kia Motors expects the plant's average operation rate to surpass 83 percent starting in July this year.
The rate has fallen to 70 percent since contract manufacturing of Hyundai Motor's New Santa Fe ended in April last year.
The plant's sales of the Telluride increased from 4,630 units in February to 6,331 units in March and 6,364 units in April. Cumulative retail sales exceeded 10,000 units last month by recording 315 units in February, 5,191 units in March, and 6,012 units in April. Kia Motors is likely to achieve its annual goals of 50,000 units without difficulties.
The Telluride is a mid-size SUV developed by Kia Motors for the North American market. The U.S. mid-size SUV market was estimated at 1.6 million units last year with five models accounting for two-thirds of the market -- the Ford Explorer (about 262,000 units), the Toyota Highlander (about 245,000 units), the Jeep Grand Cherokee (about 225,000 units), the Honda Pilot (about 160,000 units) and the Chevrolet Traverse (about 147,000 units). Although the Telluride is a latecomer, its price of US$31,690 is relatively low and the car is loaded with a 3.8-liter V6 gasoline engine. It measures up to its competing models in performances. So it attracted attention from consumers even before its launch in the United States.
The Telluride is expected to boost Kia Motors's market share in the United States this year. In the United States, SUVs such as pickups and vans account for nearly two-thirds of the total automobile market. Kia Motors has relied on small and mid-sized sedans in the North American market. The absence of large SUVs and the delayed launch of new models have given Kia Motors hard times. However, it launched a new edition of the highly popular Soul in the North American market earlier this year and is planning to launch the small SUV SP2 and a facelift model of the Niro in the second half of the year.