Why Was This Only Kia's Second Best Sales Year?

Kia Motors America announced that 2013 was the company's second best year but a drop in sales from 2012 doesn't seem to bode well when the rest of the automotive industry saw 7.6% sales growth on average.

Kia Motors America (KMA) today reported the company’s second-best annual sales in 2013 of 535,179 vehicles following the delivery of seven all-new or significantly redesigned vehicles over the course of the year. That alone should have boosted sales, except for the Soul that was introduced in the fourth quarter.

The 535,179 in vehicles for 2013 puts the Korean automaker 22,420 units behind the 2012 sales of 557,599. That's a 4% drop. If Kia had followed the industry average – and it's surprising that it didn't at least match last year's sales, it could have set a new record at approximately 600,000 vehicles.

For the second straight year the U.S.-built Optima was KMA’s best-seller and December’s total of 33,631 units helped the midsize sedan set an all-time single nameplate annual sales record for the brand at 155,893 vehicles.

Kia is big on the Soul, as it should be. In the sales release, the company said, "Since debuting in 2009, sales of the funky Soul urban passenger vehicle have increased each year and that trend continued with Kia’s iconic people mover surpassing the 118,000 unit mark following the arrival of the all-new, second generation vehicle in the fourth quarter."

The big surprise, in my opinion, is that the Kia Forte is not a better selling car. As I pointed out in an earlier TorqueNews article, "The 2014 Kia Forte has been named the Best New Compact Sedan of 2014 by Cars.com, which is a sentiment first expressed by TorqueNews.com. Better late than never for this compact sedan that's really mashing the competition – except in sales." Its sales are off a mind-boggling 12.5% compared to 2012.

Kia is putting faith in new product pulling it out of its slump. It proclaimed in the sales press release, "With 2014 marking Kia’s 20th anniversary in the U.S. market, the company’s aggressive new vehicle launch cadence will continue with the scheduled Spring arrival of the all-new 2015 K9001 rear-wheel-drive flagship sedan, which was unveiled at the Los Angeles Auto Show. A long-awaited all-new minivan and the company’s first-ever electric vehicle also are scheduled to launch in 2014."

Product diversification may help the brand, especially with the introduction of an electric vehicle. Green Car Reports editor John Voelcker reports, "In their third full year of sales, more plug-in electric cars were sold in the U.S. than ever before. The 2013 total of roughly 96,000 … electric vehicles didn't quite double the 2012 total of about 53,000, but with 16 different plug-in cars offered for sale as of this month, the numbers seem likely to grow again this year. And last year's total was more than five times the total first-year sales of 17,500 in 2011."

Kia has tried to differentiate itself from its sister company Hyundai (also suffering from low sales expectations) by being the sporty alternative and tie-ins to the NBA. The time may come for the company to rethink its approach. It's already going in the safety direction with the upcoming K900 luxury sedan in a Super Bowl commercial. Remaking itself as an alternative to Volvo could work well.

Something needs to be done to address dropping market share or else there could be a shakeup in its top leadership as happened last week to Hyundai's John Krafcik, who was let go in spite of the company increasing sales slightly in the face of production constraints. Kia has faced similar constraints as well.