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<Excerpted from Forbes.com May 31, 2013:
Balancing Act: Hyundai and Kia Share Products Under The Skin, But Must Not Blur Identities
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Jim Henry, Contributor
2013 Hyundai Azera; Hyundai photo
Like all other major global automakers, South Korea’s Hyundai Group shares more and more content and development costs among different models and different brands, to achieve economies of scale.
Yet at the same time, like other manufacturers the parent company needs to keep its Hyundai and Kia brands distinct enough to keep them from cannibalizing each other’s sales.
It happens. In recent memory, Ford Motor Co. decided it could live without the Mercury brand after all. General Motors dumped Saturn and Pontiac, not to mention Hummer and Saab. Going further back, GM pulled the plug on Oldsmobile and the Chrysler Group dropped the Plymouth brand.
Of the two Korean brands, Hyundai’s image is more upscale. Hyundai offers the Genesis and Equus luxury cars, while Kia’s lineup tops out with the new Kia Cadenza – the Kia version of the Hyundai Azera. Kia’s image is more affordable, youthful and a little sporty. Towards the low end of the lineup, Kia offers the boxy Kia Soul.
But Kia and Hyundai share the middle part of the lineup, including what industry insiders call “B,” “C” and “D” cars, in terms of increasing size classes. Most Hyundai and Kia cars and trucks would look a lot alike to an engineer wearing X-ray specs, but their exterior styling is aimed at setting them apart in the eyes of consumers.
Judging by U.S. sales, the two brands have been getting it right, with a long history of market-share gains. However, year-to-date through April, Hyundai’s U.S. sales for 2013 were up less than 1 percent, and Kia sales were down 6 percent.
Orth Hedrick, product planning director for Kia Motors America, Irvine, Calif., spoke with Contributor Jim Henry earlier this month about sharing.
How do you define the Kia brand’s DNA?
The pillars we concentrate on are: first and foremost design; technology; safety; and we also concentrate on performance. For instance we added turbo engines – anything that enhances driving.
How do you divide up which products, which attributes, which features are “more Kia,” and which are “more Hyundai?”
At my level, we don’t talk to anybody at Hyundai. … There are separate Hyundai and Kia design studies for each new model. For the engineering function, the same group of guys works on both vehicles. But they don’t develop them at the same time, in parallel. Usually they work in sequence. They finish one for one brand and then move on to the next one for the other brand.
For example?
For instance the Hyundai Elantra was the first to market, then the Kia Forte. It’s the opposite for Cadenza. The Kia Cadenza was introduced in Korea two or three years ago, and the all-new Azera was for the 2013 model year. … The Cadenza that’s all-new and going on sale here now is actually the facelifted Cadenza for the rest of the world. By “rest of the world” I mostly mean China and Korea.
Is there a short way to describe which models are which, in terms of their opposite numbers?
The B cars are the Hyundai Accent and the Kia Rio. C is Hyundai Elantra and Kia Forte. D is Hyundai Sonata and Kia Optima. D-Large is Hyundai Azera and Kia Cadenza.
Balancing Act: Hyundai and Kia Share Products Under The Skin, But Must Not Blur Identities
Jim Henry, Contributor 2013 Hyundai Azera; Hyundai photo
Like all other major global automakers, South Korea’s Hyundai Group shares more and more content and development costs among different models and different brands, to achieve economies of scale.
Yet at the same time, like other manufacturers the parent company needs to keep its Hyundai and Kia brands distinct enough to keep them from cannibalizing each other’s sales.
It happens. In recent memory, Ford Motor Co. decided it could live without the Mercury brand after all. General Motors dumped Saturn and Pontiac, not to mention Hummer and Saab. Going further back, GM pulled the plug on Oldsmobile and the Chrysler Group dropped the Plymouth brand.
Of the two Korean brands, Hyundai’s image is more upscale. Hyundai offers the Genesis and Equus luxury cars, while Kia’s lineup tops out with the new Kia Cadenza – the Kia version of the Hyundai Azera. Kia’s image is more affordable, youthful and a little sporty. Towards the low end of the lineup, Kia offers the boxy Kia Soul.
But Kia and Hyundai share the middle part of the lineup, including what industry insiders call “B,” “C” and “D” cars, in terms of increasing size classes. Most Hyundai and Kia cars and trucks would look a lot alike to an engineer wearing X-ray specs, but their exterior styling is aimed at setting them apart in the eyes of consumers.
Judging by U.S. sales, the two brands have been getting it right, with a long history of market-share gains. However, year-to-date through April, Hyundai’s U.S. sales for 2013 were up less than 1 percent, and Kia sales were down 6 percent.
Orth Hedrick, product planning director for Kia Motors America, Irvine, Calif., spoke with Contributor Jim Henry earlier this month about sharing.
How do you define the Kia brand’s DNA?
The pillars we concentrate on are: first and foremost design; technology; safety; and we also concentrate on performance. For instance we added turbo engines – anything that enhances driving.
How do you divide up which products, which attributes, which features are “more Kia,” and which are “more Hyundai?”
At my level, we don’t talk to anybody at Hyundai. … There are separate Hyundai and Kia design studies for each new model. For the engineering function, the same group of guys works on both vehicles. But they don’t develop them at the same time, in parallel. Usually they work in sequence. They finish one for one brand and then move on to the next one for the other brand.
For example?
For instance the Hyundai Elantra was the first to market, then the Kia Forte. It’s the opposite for Cadenza. The Kia Cadenza was introduced in Korea two or three years ago, and the all-new Azera was for the 2013 model year. … The Cadenza that’s all-new and going on sale here now is actually the facelifted Cadenza for the rest of the world. By “rest of the world” I mostly mean China and Korea.
Is there a short way to describe which models are which, in terms of their opposite numbers?
The B cars are the Hyundai Accent and the Kia Rio. C is Hyundai Elantra and Kia Forte. D is Hyundai Sonata and Kia Optima. D-Large is Hyundai Azera and Kia Cadenza.
