As an example, Kia Motors America axed CEO Len Hunt just about a month ago during a visit from Byung Yo Anh, the President of Kia Motors proper. Hunt, an industry veteran with years of experience at VW of America was wooed over to Kia just in 2005 with much fanfare.
According to press accounts, the Korean management gets especially antsy to get out the axe when either Hyundai or Kia don’t reach their lofty sales goals. Kia was supposed to sell 350,000 cars last year in the U.S. but fell about 20,000 short. This year, the sales goal is set for 375,000. I wouldn’t like to be the next CEO as reaching that goal in this economic climate is about as likely as Britney Spears being named Mother of the Year.
The timing is even less fortuitous in that many Americans are finally looking to downsize into vehicles that get better gas mileage. The only Hyundai/Kia on the horizon I can think of that can tap into that market is the new Hyundai Elantra Touring.
The biggest problem, though, has to be that Hyundai and Kia are both moving their models up market in price. I am sorry, but a lot of people have a big problem when the sales invoice on their Hyundai gets above the magic $30,000 mark.
As a result, I can’t see the much hyped new Hyundai Genesis setting the dealer lots on fire. Even worse is the Kia Amanti, a competent luxury sedan saddled with the humiliation of looking like a harpooned walrus.
While many compare the Korean auto business model with that of their Japanese forebears, there are a few key differences. For one, Hyundai often times sets up its sales targets based on how many cars their factories can produce, not how many their dealers can sell.
An example of this is the fact that there are currently about 32,000 Hyundai Sonatas parked around the Alabama plant where they are built. Most importantly, they are sitting there without any dealer orders for them. The next time you see them I am sure they will have an Enterprise Rental Car keychain attached to their keys.
So what can a new American Hyundai/Kia executive do to help keep his or her job? Stick to the strengths of the brands---economy, price and increasingly some functional style as with the Kia Soul concept.
Moving into a luxury market takes years of people starting to change their perceptions. It took years of people loving their Toyota Corollas and Camrys before they would accept the notion of Lexus.
This continued axing of North American management has had a long and often times bizarre history. My favorite firing story came at a dealer meeting in Las Vegas where they decided to fire an earlier Kia CEO named Peter Butterfield at a corporate dinner. Apparently it was done right between the entrée and desert. Let’s hope Kia picked up the check.
via guest blogger James Hamel