In a significant shift for the automaker, Kia America has experienced a remarkable transformation over the past five years, resulting in a surge of affluent buyers and a substantial increase in its average transaction price. Sean Yoon, the chief executive of Kia America, revealed in a recent interview with Auto News that the company's revamped long-term brand strategy, initiated with the introduction of the Telluride in March 2019, has propelled Kia beyond its reputation as a value brand.
Yoon proudly stated, “In terms of retail sales volume since 2018, excluding fleet, we grew by 31 percent, and our average transaction price increased 60 percent. A huge jump over the last five years.” This notable surge in sales and transaction prices reflects Kia's success in attracting a wealthier clientele. Furthermore, the company's appeal to younger generations, specifically Gen Y and Gen Z buyers, bodes well for its future, as the buying power shifts from the previous generation, Gen X.
Despite the significant increase in average transaction prices since 2018, Yoon emphasized that Kia remains committed to maintaining the value proposition of its vehicles. The company aims to steer clear of bundling desirable options with less desirable ones, ensuring that customers receive a high-quality product at a reasonable price. Kia also intends to introduce new safety systems without inflating prices—a testament to its dedication to consumer satisfaction.
Kia's transformation extends into the realm of electric vehicles (EVs), differentiating itself from competitors with striking designs exemplified by the EV6 and the all-new EV9 SUV. Yoon expressed confidence in Kia's ability to leverage its strong internal combustion engine (ICE) sales to drive success in the EV market. Currently operating in 60% of the market, Kia has witnessed its market share rise from just over 3% to 5%.
While the demand for Kia's SUVs accounts for 80% of its sales, Yoon believes that the company has yet to reach the full sales potential of popular models such as the Sportage, Seltos, and Telluride. As sales of these models continue to rise, Kia's market share is expected to grow accordingly. The forthcoming addition of the EV5 SUV to the company's lineup, alongside the introduction of the EV9 as Kia's first electric SUV, further augurs well for the brand's prospects, particularly in the North American market.
Kia America has undergone a remarkable transformation, attracting more affluent buyers and experiencing a substantial increase in average transaction price. With a focus on maintaining value, introducing new safety systems, and capitalizing on the growing market for EVs, Kia is poised for a bright future in the automotive industry, especially in North America.