Will Kia Motors Be "Pontiac-ed" Out of Existence?

AUTO CENTRAL - July 9, 2010: In a story published one month ago on 24/7 Wall Street, a financial news and opinion website, Kia Motors is projected as one of the top 10 brands that may disappear in 2011. The story is featured today in Yahoo.com's financial section.

The story, written by Douglas A. McIntyre, states that while "Its stable mate, Hyundai USA, has a reputation for high quality cars like the Sonata and Genesis. Kia sells "low rent" cars..." The upshot of the story's contention is that maintaining two distinct brands, Hyundai and Kia, might be too expensive for the South Korean conglomerate Hyundai Kia Automotive Group.

The overall story also cited such well known brand names as Radio Shack, Readers' Digest, Thrifty Auto Rental, and Zale jewelry as likely to go belly-up. McIntyre never reveals specific details about where his prognostications come from. Considering Kia's outstanding sales success during the global financial depression it seems unlikely to The Auto Channel that Kia's forthcoming demise is realistic. Also, contrary to McIntyre's depiction of Kia's vehicles as "low rent," we generally view the Kia products as being the best buys on the market.

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SEE ALSO: Kia Vehicle Reviews

Background on Kia
Kia is South Korea's oldest car company, founded on June 9, 1944 as a manufacturer of steel tubing and bicycle parts by hand, and has operated as one of the country's conglomerate since. In 1952, Kia changed its name from Kyungsung Precision Industry, and later built motorcycles (starting in 1957), trucks (1962) and cars (1974). The company opened its first integrated automotive assembly plant in 1973, the Sohari Plant. Starting in 1986, in partnership with Ford, Kia produced several Mazda derived vehicles for both domestic sales in South Korea into other countries. These models include the Pride (based on the Mazda 121) and Avella, which were sold in North America and Australasia as the Ford Festiva and Ford Aspire.

In 1992, Kia Motors America was incorporated in the United States. The first Kia-branded vehicles in the United States were sold from four dealerships in Portland, Oregon in February 1994. Since then, Kia expanded methodically one region at a time. Dealers in 1994 sold the Sephia, and a few years later the United States line expanded with the addition of the Sportage.

However, Kia's bankruptcy in 1997, part of the Asian financial crisis, resulted in 51% of the company being acquired in 1998 by South Korean rival Hyundai Motor Company, outbidding Ford Motor Company which had owned an interest in Kia Motors since 1986. Subsequently, however, Hyundai has divested some of its ownership of Kia Motors, and currently Hyundai Motor Company owns less than 40% of the company.

In October 2006, Kia Motors America broke ground for Kia Motors Manufacturing Georgia in West Point, Georgia, representing a $1 billion USD investment for the company.[11] Kia Motors Manufacturing Georgia opened in February, 2010. For 2009, KMA recorded its 15th consecutive year of increased U.S. market share.