Three-let­ter threats.

The Washington Post Sunday - - BUSINESS - WAR­REN BROWN brownw@wash­

Korea’s Kia is im­pres­sive. And watch out for China’s BYD.

The tra­di­tional global au­to­mo­bile in­dus­try has two three-let­ter threats. One is Kia. The other is BYD. Kia, the other half of SouthKorea’s Hyundai-Kia Au­to­mo­tive Group, poses an im­me­di­ate threat. BYD, a China-based en­ergy com­pany as­pir­ing to pro­duce the world’s most ef­fi­cient and af­ford­able elec­tric cars, threat­ens to dom­i­nate the in­dus­try’s fu­ture.

In this week’s col­umn, we’ll fo­cus on Kia, which in the course of a fewyears has be­come an im­pres­sive ri­val toHonda, Toy­ota, Nis­san and other com­pa­nies in the busi­ness of pro­duc­ing mid­size fam­ily au­to­mo­biles. Con­sider, for ex­am­ple, the 2011 Kia Op­tima SX. The Op­tima’s de­but in 2001 was greeted with a global yawn. The car was be­yond dull. It was de­press­ing in de­sign, en­gi­neer­ing and per­for­mance. Its at­trac­tion— to the ex­tent there was any— lay in its low price.

Now, a decade later, the newOp­tima sedan is poised to take mar­ket share from ev­ery other man­u­fac­turer sell­ing mid­size fam­ily cars in Amer­ica. That in­cludes Volk­swa­gen ofGer­many, which has mounted an ex­pen­sive cam­paign to top­ple Toy­ota from it­sNo. 1 spot as the world’s biggest man­u­fac­turer and re­tailer of au­to­mo­biles— a goal Volk­swa­gen hopes to reach largely through the sale of mid­size fam­ily sedans such as the Jetta and the Pas­sat.

But Volk­swa­gen will have to deal with Kia in climb­ing to the top of that com­mer­cialMount Olym­pus. Deal­ing with Kia won’t be easy.

Let’s ex­am­ine value for dol­lar, a cat­e­gory in which Kia beats Volk­swa­gen and prac­ti­cally ev­ery­one else.

The base Kia Op­tima LX starts at $18,995. The topof-the-line Op­tima SX, driven for this col­umn, is priced at $25,995. For 2011, pric­ing for the base Jetta, a strip­per if ever there was one, starts at $14,995. The top-notch diesel-pow­ered Jetta TDI car­ries a man­u­fac­turer’s sug­gested re­tail price of $22,995.

If value for dol­lar were based only on pric­ing, the Jetta would have an edge. But the “value” part of the pric­ing equa­tion speaks to what you get for what you pay. In the 2011 Kia Op­tima, you get more.

The ex­te­rior and in­te­rior styling of the newOp­tima sur­pass what is of­fered on and in the 2011 Jetta. The Op­tima of­fers more stan­dard equip­ment. The new Jetta TDI, for ex­am­ple, has a tor­sion-beam rear sus­pen­sion, which is less fa­vor­able in ve­hi­cle han­dling. The newOp­tima SX of­fers as stan­dard equip­ment a more so­phis­ti­cated multi-link rear sus­pen­sion, which greatly en­hances han­dling.

In short, Volk­swa­gen’s strat­egy is to as­suage con­sumer price sen­si­tiv­ity by re­mov­ing con­tent from its ve­hi­cles, which can be viewed as a com­mon-sense ap­proach in eco­nom­i­cally hard times. At Volk­swa­gen, you pay for what you get, and what you get meets con­sumer ex­pec­ta­tions.

Kia­may have a bet­ter idea. You pay a bit more. But what you get vastly ex­ceeds con­sumer ex­pec­ta­tions. It is a fa­vor­able shock, one that elicited joy and sur­prise from nearly ev­ery­one who got be­hind the wheel of the Op­tima SX.

Ri­aMangla­pus, who works with me on ve­hi­cle eval­u­a­tions, was so happy that I was go­ing to the North Amer­i­can In­ter­na­tional Auto Show in Detroit and leav­ing the Op­tima SX in her hands, she drove me to the air­port.

“Wow!” she said. “What a car! I can’t be­lieve this is a Kia. Wow! Wow!”

No one expressed that kind of joy over the 2011 Jetta. Peo­ple were just happy that Volk­swa­gen had re­duced the car’s price. But that hap­pi­ness was tem­pered by the re­al­iza­tion of the “de-con­tent­ing” that Volk­swa­gen em­ployed in get­ting to that price.

At the me­dia pre­viewof the auto show here, the Kia stand was swarm­ing with jour­nal­ists ex­cit­edly ex­am­in­ing the newOp­tima. But over at the Volk­swa­gen dis­play, they were puz­zling overVW’s in­tro­duc­tion of a newmid­size Pas­sat fam­ily sedan. Their con­sen­sus: The newPas­sat is go­ing to have to be priced just right and of­fer much more than con­sumers ex­pect to top the Op­tima and its sib­lingHyundai Sonata sedan in the mar­ket­place.

A decade ago, hardly any­one would have said any­thing like that about any­thing from Kia. It causes one to won­der about the prospects of China-based BYD in the au­to­mo­bile busi­ness.

The com­pany has spent mil­lions on elab­o­rate dis­plays at the Detroit show in the past four years. But it has yet to of­fer one car in theUnited States.

But that day will come soon, pos­si­bly some­time in 2012, saidMicheal Austin, vice pres­i­dent of BYD Amer­ica Corp.

And when that day comes, BYD will of­fer all-elec­tric and hy­brid elec­tric ve­hi­cles pow­ered by the world’s most ad­vanced bat­ter­ies, charged by wind power and other re­new­able en­ergy sources, Austin said. Don’t laugh. BYD’s motto, backed by hun­dreds of mil­lions of dol­lars in re­search and devel­op­ment, is “Build Your Dreams.”


Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.