2014 Kia Soul helping sales numbers

Kia Sales Numbers Look Rosy, But There's Trouble

Kia is out with its sales numbers for 2013, and everything appears to be good, but there could be trouble ahead for the Korean manufacturer because sales overall are lagging behind 2012 numbers at this point.

As Kia posted today, it had record November sales of 45,411 units with the "all-new second-generation Soul and the refreshed 2014 model year Optima midsize sedan [leading] the way with 12,870 and 10,871 units sold, respectively. Year-to-date sales crossed the 500,000 unit mark for the second time in company history."

It's that last number that seems really impressive. By crossing the 500,000 unit mark threshold for the second time – the first time being in 2012 – Kia must be doing well as a brand. But then, one just needs to look at the numbers from 2012 to see things are starting to slip.

Through November 2012 at this point, the Korean car maker had sold 518,421 vehicles. As of Nov. 30, 2013, Kia had sold 501,548 vehicles. That's a 3.3% drop by comparison and Kia has added the Cadenza to its lineup. Without the 7,782 Cadenzas sold to date, the manufacturer is off 4.7%.

The problem is almost all of the models except two are flat or down from last year's sales numbers. Without the refreshed 2014 Kia Optima and the all-new 2014 Kia Soul, the brand is in trouble.

Let's look at the Kia sales breakdown:

  • Kia Rio is up slightly (about 600 cars or less than 2%) at 38,586 vs. 37,932 in 2012.
  • Kia Forte is down significantly from 71,405 in 2012 down to 61,844. That has to be a big disappointment because the Forte is all-new (and a great car) for the 2014 model year. Its sales should be higher, especially because buyers should have been in delay mode towards the end of 2012.
  • Kia Optima with sales of 146,419 vs. 140,391 is about 3.5% - a healthy number on par with industry growth.
  • Kia Sportage is down 4300 units from 34,661 in 2012 to 30,438 in 2013.
  • Kia Sorento is down almost 10,500 units or 9.6% from 108,630 in 2012 to 98,167 in 2013.
  • Kia Sedona, the brand's minivan, is also relatively anemic with a huge drop from 16,801 in 2012 down to 6578 in 2013. That would seem to indicate the minivan is on life support for the brand but it's not, which is really perplexing and is explored more in detail below.
  • Kia Soul is another uptick for the brand. Just reintroduced in late September, the 2014 model has year-to-date sales of 111,734 vs. 108,601 in 2012. That's almost a 3% sales increase.

The real challenge facing Kia in the short term is how to match the 2012 sales figures of 557,599 vehicles, which is its record ever for a single year. To hit that mark it is going to have to sell 57,000 vehicles in December, which, simply put, isn't going to happen without a ridiculous amount of incentives and fleet sales. Its best December sales month was probably 2011 when it sold 43,390 vehicles.

Are things going to get better for 2014? They should seem to because the new Kia K900 has been introduced. But, even with good sales, don't expect it to top out at more than 2000 vehicles a year because it faces stiff competition from its sister company Hyundai and its Equus, which has sold 3226 vehicles this year.

Kia is poised to stumble in 2014 with the introduction of a Kia electric vehicle. It's not even on the market yet and doubts have been raised about its range. Also, Kia is late to the game with an electric vehicle and Hyundai is largely ignoring that arena to focus on a hydrogen fuel cell vehicle. Kia is going to have to pull off a moderate miracle to appeal beyond just typical electric vehicle buyers to gain traction and increased sales.

Finally, Kia announced today it is bringing out a "long-awaited all-new minivan" in 2014. I'm a big fan of minivans (call it a character flaw) but I wonder who has long awaited an all-new Kia minivan. It seems like an odd direction for the company to head into because minivan sales in the U.S. are relatively flat and frankly owned by Toyota, Honda and Chrysler. In fact, until Kia mentioned it was introducing a new minivan I forgot it even sold a minivan.

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Comments

The company has virtually doubled since 2008, production levels are now capped to put practices into place to maintain quality before the company grows any further. This lag will probably continue for the next 18-36 months.