Opinion: Kia Needs a Luxury Brand

[Drew Dowdell]

 

While Hyundai owns a controlling interest in Kia and they share a significant amount of technology, they still operate as somewhat independent companies. For that reason, Kia needs a luxury brand to match.

Hyundai officially launched its Genesis luxury brand in the US in 2016 with the G90, the replacement for the Hyundai Equus. Since then, Genesis has rapidly evolved into a true luxury automaker with three sedans and 3 SUVs. My recent drives in Genesis vehicles gave me the impression that Genesis is Hyundai’s torpedoes to the Mercedes-Benz’s Bismark. With its sumptuous ride, coddling interior, and robust engines, Genesis proves this. But as fantastic a job as Genesis has done with its lineup; it won’t appeal to everyone. On the scale of luxury, Genesis is clearly towards the chic comfort end of the spectrum. There is a whole other end of the spectrum that is more about sport and activity that the Hyundai could cover as well.

This is where Kia comes in. While Genesis focuses on comfort, Kia should form a luxury brand to cover the BMW / Jaguar / Land Rover side of things. While Kia is moving up in the world, like Volkswagen, they will never be considered a luxury brand while a Soul full of hamsters is sitting in their showrooms. Kia needs to photocopy Genesis’ playbook from 2016 and build a luxury brand of their own that focuses on sportiness. Let’s call the brand KLB for now.

KLB can start by poaching the Stinger and moving the styling and materials upmarket to compete with the BMW 3-Series. Create a new, rugged and luxurious version of the Kia Borrego / Mohave, the rear-wheel-drive SUV that left the US after 2009 but is still in production in other markets, to take on the likes of the Land Rover Discovery/Defender and Lexus GX. After that, share platforms with Genesis but with an outdoorsy (for the SUVs) and sporty (for the sedans) will fill out the rest of the lineup. Where a Genesis SUV is curvy, the KLB should be boxy.

Where a Genesis sedan is soft, a KLB sedan should be firm. Beyond those styling and materials differences, the Genesis powertrain lineup could carry over unchanged. Genesis plans to make a big push into electrification in the next few years, and so does Land Rover. Giving KLB an electrified competitor to the Defender and 5-series would gain customers for the Hyundai group that might otherwise look elsewhere.

Do we really need another luxury brand? Some may say no, but I say if anyone is going to do it, it should be Kia.

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[G. David Felt]

I totally agree, this is where KIA should take tech from Rimac and build a Luxury Performance on Road and Off-Road line of auto's that would complement Genesis. I could see them truly having a decent BEV Luxury Line that goes beyond what Kia's EV6 type auto is and can squarely compete with the Europeans and American auto companies.

My question to you Drew, Do you think Kia should do this with ICE and Hybrid or focus fully on BEV?

[smk4565]

I think Genesis is enough for the Hyundai/Kia company.  Genesis sold 200k units globally in 2021, that is 10% of what the Germans brands do, I don't know that they need a KLB to compete with Genesis (which they'd mostly be doing) and then try to fight BMW.  

The Stinger flopped, if it was the KLB Stinger, it would have flopped too, the interior wasn't that good, and the car was over priced, the Stinger should have been marketed to Mustang/Challenger buyers that want 4 doors or Charger buyers that want a smaller, more modern car, not against BMW buyers that aren't going to give Kia the time of day.

I do think Kia should bring back the Borrego as a Wrangler/Bronco competitor, just like Nissan needs the Xterra back for the same segment.

The problem Genesis will have, and a hypothetical KLB will have is they aren't going to have the halo products or racing pedigree to get the big time worldwide recognition.  So their ceiling is basically what Infiniti/Lincoln are today.  That isn't worth 25 years and billions of dollars to try to build KLB up to an also ran luxury brand.  And if they made KLB EV only, then it has to out-Tesla, Tesla, and I don't see how they do that.  Tesla was there first, they'd just be seen as a cheap copy.  And if they put all that money into KLB and it bombs, what happens to Kia?  do they start to fall behind, and competition starts to eat them up?

[Drew Dowdell]

13 hours ago, smk4565 said:

I think Genesis is enough for the Hyundai/Kia company.  Genesis sold 200k units globally in 2021, that is 10% of what the Germans brands do, I don't know that they need a KLB to compete with Genesis (which they'd mostly be doing) and then try to fight BMW.  

The Stinger flopped, if it was the KLB Stinger, it would have flopped too, the interior wasn't that good, and the car was over priced, the Stinger should have been marketed to Mustang/Challenger buyers that want 4 doors or Charger buyers that want a smaller, more modern car, not against BMW buyers that aren't going to give Kia the time of day.

I do think Kia should bring back the Borrego as a Wrangler/Bronco competitor, just like Nissan needs the Xterra back for the same segment.

The problem Genesis will have, and a hypothetical KLB will have is they aren't going to have the halo products or racing pedigree to get the big time worldwide recognition.  So their ceiling is basically what Infiniti/Lincoln are today.  That isn't worth 25 years and billions of dollars to try to build KLB up to an also ran luxury brand.  And if they made KLB EV only, then it has to out-Tesla, Tesla, and I don't see how they do that.  Tesla was there first, they'd just be seen as a cheap copy.  And if they put all that money into KLB and it bombs, what happens to Kia?  do they start to fall behind, and competition starts to eat them up?

You're missing the entire point.  The Stinger flopped because it is a Kia with a Kia interior but riding on a Genesis platform.  It's the VW Phaeton all over again (except the Phaeton did have a nice interior for the class).  Genesis has proven to me that they can do the interiors they need to do. I really liked the Telluride as a possible vehicle for Albert... but he absolutely declined ANY KIA badged vehicle.  He does like the Genesis options, and he knows they are the same company.  He just remembers the original Sportage and Sephia... and more recently the Soul.... and wants nothing to do with them.

The Genesis SUVs are fantastic vehicles for what they aim to be... but they are not off-roaders in the same vein as something like Discovery, Lexus GX, or the Rivian R1S.  On the higher end they are Maybach-Lite. 

At my house, I'd rather have a luxury Telluride with a Genesis level interior and one of the turbo-V6es for me while Albert would rather a GV80. It is purely a subjective styling thing.  I'm more motorcycle, hiking, skiing, scuba diving, cabin in the woods.... he's more going to the symphony, fine dining, and a penthouse apartment on Park Avenue.  

[Robert Hall]

Of the Genesis SUVs, I like the GV70...love the rear end.  Of their sedans, the G90 looks like a comfy cruiser, though the G70 would probably be more fun.

[Drew Dowdell]

2 minutes ago, Robert Hall said:

Of the Genesis SUVs, I like the GV70...love the rear end.  Of their sedans, the G90 looks like a comfy cruiser, though the G70 would probably be more fun.

The G70 is definitely the sportiest in the Genesis line. The GV70 is a fantastic vehicle too... Albert would love it. It's a cush cruiser with a lot of power. 

[smk4565]

4 hours ago, Drew Dowdell said:

You're missing the entire point.  The Stinger flopped because it is a Kia with a Kia interior but riding on a Genesis platform.  It's the VW Phaeton all over again (except the Phaeton did have a nice interior for the class).  Genesis has proven to me that they can do the interiors they need to do. I really liked the Telluride as a possible vehicle for Albert... but he absolutely declined ANY KIA badged vehicle.  He does like the Genesis options, and he knows they are the same company.  He just remembers the original Sportage and Sephia... and more recently the Soul.... and wants nothing to do with them.

The Genesis SUVs are fantastic vehicles for what they aim to be... but they are not off-roaders in the same vein as something like Discovery, Lexus GX, or the Rivian R1S.  On the higher end they are Maybach-Lite. 

At my house, I'd rather have a luxury Telluride with a Genesis level interior and one of the turbo-V6es for me while Albert would rather a GV80. It is purely a subjective styling thing.  I'm more motorcycle, hiking, skiing, scuba diving, cabin in the woods.... he's more going to the symphony, fine dining, and a penthouse apartment on Park Avenue.  

The Telluride I think has best in class interior, especially the higher trim version.  But that doesn't mean Kia is ready to take on BMW, the worst vehicle in a hypothetical KLB would have to be better than the Telluride.  

I've seen the Genesis GV70 and GV80 inside and out in person, haven't driven one.  They are nice, but I wouldn't put them above any of the German 3 in terms of interior, and they share an engine with the Santa Cruz, not exactly a world beater engine there, not even a hybrid or 48-volt system, no cutting edge technology.   And oddly enough, I've written a few estimates on them, the parts cost on those is pretty ridiculous and you wait months for parts because they don't have them.  For a brand that has only been around a few years, they do a nice job, but I wouldn't put them over Lexus or the Germans.

And there is no reason they can't expand the Genesis line, Mercedes makes a hardcore off road SUV and the make the Nurburgring record setting sports car.  Genesis can make an SUV with GV80 luxury and Bronco Raptor off road ability, they can make a Porsche 911 or Corvette competitor, a Rolls-Royce competitor, etc.  There is no rule that their brand must be 3 sedans and 3 SUV's in small-medium-large as if they are soda and popcorn sizes at a movie theatre.   

And then what do you do with dealer network, they want Genesis to be stand alone I think, although in Wexford the Genesis are sold at the Hyundai dealer.  Do you sell Kia luxury cars are Kia dealers, or try to launch another whole dealer network.

[Drew Dowdell]

Well keep in mind that while Hyundai owns a controlling interest in KIA, they still operate pretty independently by modern standards. They are much more independent than any of the American brands are from their parents. 

[riviera74]

KIA will get a luxury marque as soon as Amanti rises from Mazda.  NOT GONNA HAPPEN.  KIA is a pre-2000 Plymouth, nothing else.

[Drew Dowdell]

6 hours ago, riviera74 said:

KIA will get a luxury marque as soon as Amanti rises from Mazda.  NOT GONNA HAPPEN.  KIA is a pre-2000 Plymouth, nothing else.

Kia is nothing like pre-2000 Plymouth. They have unique models and they don't share styling with Hyundai. There is no Soul equivalent at Hyundai, there is no Veloster equivalent at Kia. Kia has the Carnival while Hyundai has nothing. Even the Palisade and Telluride have different personalities visually and the Telluride is slightly more capable off-road. 

[surreal1272]

6 hours ago, riviera74 said:

KIA is a pre-2000 Plymouth

As someone who has had ownership time in both a Plymouth and a Kia, I will respectfully disagree with your comparison. 

[riviera74]

One question: where does KIA fit into Hyundai/KIA/Genesis anyway?  Seems to me that KIA is the value brand for the Koreans.

[G. David Felt]

On 3/5/2022 at 5:49 PM, riviera74 said:

One question: where does KIA fit into Hyundai/KIA/Genesis anyway?  Seems to me that KIA is the value brand for the Koreans.

Kia and Hyundai were both value brands for Korea and the world, just different styles, much the same as Chevrolet / GMC. GMC and Hyundai have a few more luxury packages than the Chevrolet/Kia. They really do not have midrange like Buick, but then Hyundai has added more luxury packages so I guess in this regards you could say Kia/Hyundai/Genesis as the entry, mid and luxury line, but then Kia is so different from the other two that you could have Kia have a luxury performance line to go with their style.

[Robert Hall]

30 minutes ago, David said:

Kia and Hyundai were both value brands for Korea and the world, just different styles, much the same as Chevrolet / GMC. GMC and Hyundai have a few more luxury packages than the Chevrolet/Kia. They really do not have midrange like Buick, but then Hyundai has added more luxury packages so I guess in this regards you could say Kia/Hyundai/Genesis as the entry, mid and luxury line, but then Kia is so different from the other two that you could have Kia have a luxury performance line to go with their style.

Kia and Hyundai each seem to have a vertical ladder within each brand...both have cheap entry level cars and CUVs, but also semi-premium Buick/GMC-ish larger sedans and CUVs....each brand has a spectrum (though they both have cut their largest most premium sedans).  Kia seems a bit more premium in some of their models?  They seems to have a lot of interchangeable models that seem to differ only in styling between the brands.   The Stinger and Velociter are a couple models that seem to stand out from the generic stuff..

Edited March 7, 2022 by Robert Hall

[G. David Felt]

27 minutes ago, Robert Hall said:

Kia and Hyundai each seem to have a vertical ladder within each brand...both have cheap entry level cars and CUVs, but also semi-premium Buick/GMC-ish larger sedans and CUVs....each brand has a spectrum (though they both have cut their largest most premium sedans).  Kia seems a bit more premium in some of their models?  They seems to have a lot of interchangeable models that seem to differ only in styling between the brands.   The Stinger and Velociter are a couple models that seem to stand out from the generic stuff..

I see Kia as more of a Pontiac type division and Hyundai as the Chevrolet. I agree both have their own twist that sets them apart now compared to when they first started and the badge engineering was so bad, many thought why have both. Now it is clearer that they both have gone their own path and while still using the same platform, have clearly defined their own style.

[balthazar]

But isn’t this where folk ‘look up’ the parent corporation and proclaim “there’s too much overlap/ internal competition/ duplication”?

You see it all. The. Time. with Chevy trucks/SUVs and GMC…

[Drew Dowdell]

5 hours ago, balthazar said:

But isn’t this where folk ‘look up’ the parent corporation and proclaim “there’s too much overlap/ internal competition/ duplication”?

You see it all. The. Time. with Chevy trucks/SUVs and GMC…

That’s why I’m suggesting that they do not overlap, but hit different “styles” of luxury. Genesis takes on the metro-chic luxury of Mercedes. KLB goes after the woodsy “I own a working estate In Connecticut” like LandRover and the Lexus GX/LX

[balthazar]

'Different styles' still compete in many of the same segments/price tiers. They'll have to.

[G. David Felt]

3 hours ago, balthazar said:

'Different styles' still compete in many of the same segments/price tiers. They'll have to.

Yes, there will always be overlap, but I do believe you could have two luxury divisions that have clearly different style and marketing messages and they would both succeed.

[balthazar]

I strongly doubt it.
Anyone have a real world example?

[Robert Hall]

8 hours ago, balthazar said:

I strongly doubt it.
Anyone have a real world example?

In olden days, GM had two near-luxury (what we call premium today?) brands that overlapped--Buick and Oldsmobile.  Though the differences over time seemed to be mainly superficial styling details (grilles and taillights mostly by the 80s)...they always seemed to be two sides of the same coin to me. 

[Drew Dowdell]

15 hours ago, balthazar said:

'Different styles' still compete in many of the same segments/price tiers. They'll have to.

Yes... but they'll compete for different people. The LR Defender and the Lincoln Aviator and Acura MDX and Porsche Macan and Lexus GX460 all start at around $50k +/- $5k

Are you suggesting that there is a lot of cross-shopping between those models just because they're the same price SMK @balthazar?

I'm suggesting that Genesis looks at the GLE/Aviator/Macan buyers while while KLB does the more off-roady, woodsy Defender / GX buyers

12 hours ago, balthazar said:

I strongly doubt it.
Anyone have a real world example?

There's nobody left that has two luxury divisions around the same price class except perhaps Jaguar-Land Rover.  But it is exactly them who I would point to as an example of suitable differentiation.  Their issues aren't from competing with each other but a host of other things.

[Drew Dowdell]

3 hours ago, Robert Hall said:

In olden days, GM had two near-luxury (what we call premium today?) brands that overlapped--Buick and Oldsmobile.  Though the differences over time seemed to be mainly superficial styling details (grilles and taillights mostly by the 80s)...they always seemed to be two sides of the same coin to me. 

You're thinking old style rebadging. That is exactly what I wouldn't want to do.  Where Genesis is curvy, KLB should be square. Where Genesis is plush (and their higher trims are very plush), KLB should be firm and restrained. Designed with function in mind rather than flare.

[balthazar]

Jag/LR are no where near the volume of H-K-G-+. There will always be a handful of buyers for given premium item, but with the existing premium players, the upcoming newbies… is there any room left for any worthwhile volume?
I don’t see Hyun being content with Jag-volume.

AFA cross-shopping : the OEMs set the stage with configuration & pricing, it’s the consumer who decides what to cross-shop. In other words; buyers aren’t cross shopping a Sierra Denali and a Ford Maverick. But a Denali / Platinum F-150? That’s gonna happen, yes.

[Drew Dowdell]

2 hours ago, balthazar said:

Jag/LR are no where near the volume of H-K-G-+. There will always be a handful of buyers for given premium item, but with the existing premium players, the upcoming newbies… is there any room left for any worthwhile volume?
I don’t see Hyun being content with Jag-volume.

AFA cross-shopping : the OEMs set the stage with configuration & pricing, it’s the consumer who decides what to cross-shop. In other words; buyers aren’t cross shopping a Sierra Denali and a Ford Maverick. But a Denali / Platinum F-150? That’s gonna happen, yes.

@smk4565, did you hack into @balthazar's account?

Jaguar/LR are barely the volume of the Denali trim at GMC.  I wasn't speaking of volume, I'm speaking of differentiation of purpose.  Defender and Discovery buyers are not cross-shopping against the E-Pace or F-Pace, they're looking at the Lexus GX, or maybe Yukon Denali or Grand Cherokee Summit if they're open to brand-slumming it.   E-Pace and F-pace buyers are going to cross-shop with Macan or X4/5 or GLE "coupe" or the Infiniti QX70 if they still made it.

The Genesis GV70 and GV80 are direct broadside torpedo shots to the GLC/RX/MDX (the XT5 should be here, but it's so outclassed on the interior I can't put it in the list with a straight face) and the GLE/QX60/Aviator respectively.  These are the big cushy cruiser crossovers. 

What I'm saying is there is room for KLB to do a better Defender / Discovery / GX460... or an Escalade/Navigator/LX (hybrid or EV only of course) 

then add the Stinger with a substantially upgraded interior and a "rugged" small EV (think Baby Rivian) and you've got yourself a luxury brand that doesn't overlap with Genesis. 

[balthazar]

That's what I said- J/LR co-existing as premium brands is inconsequential because the volume is so very low.  But it was the only example currently of such.  To my point- why would folk think there's a business case for a 'kia premium' when hyundai already has a premium?

'One's sharp and one's rounded' isn't going to make a business case for the investment.  Not that they'd be straight rebadges, but still.

The premium tier is well-rounded, and more & more players are attempting to get into it (for the margins).  You have the established brands, you have mainstream brands creeping into premium, yo have mainstream brands also splintering off with sub-brands, and you have a bunch of startups going right into the heart of it. Almost all the battery electrics are plopping right into the premium price bracket.  Rivian thinks they're going to sell 300K/yr - where's that volume coming from? Or should I say; 'who'?

There hasn't been this many new brands (counting some of the potential startups who haven't started up yet, also) in I don't know how long. On one hand- maybe it's indicative of there being demand for it... however; the last 2 years have been anything but normal to judge that.  On the other, there may well be a guarantee of some quick & early deaths due to over-supply.

Edited March 8, 2022 by balthazar

[Drew Dowdell]

On 3/8/2022 at 6:13 PM, balthazar said:

That's what I said- J/LR co-existing as premium brands is inconsequential because the volume is so very low.  But it was the only example currently of such.  To my point- why would folk think there's a business case for a 'kia premium' when hyundai already has a premium?

'One's sharp and one's rounded' isn't going to make a business case for the investment.  Not that they'd be straight rebadges, but still.

The premium tier is well-rounded, and more & more players are attempting to get into it (for the margins).  You have the established brands, you have mainstream brands creeping into premium, yo have mainstream brands also splintering off with sub-brands, and you have a bunch of startups going right into the heart of it. Almost all the battery electrics are plopping right into the premium price bracket.  Rivian thinks they're going to sell 300K/yr - where's that volume coming from? Or should I say; 'who'?

There hasn't been this many new brands (counting some of the potential startups who haven't started up yet, also) in I don't know how long. On one hand- maybe it's indicative of there being demand for it... however; the last 2 years have been anything but normal to judge that.  On the other, there may well be a guarantee of some quick & early deaths due to over-supply.

Because they operate as separate companies that share tech rather than the GM model of multiple divisions that develop together. 

[balthazar]

[reads up on Hyundai Motor Group...]
Got it.