Kia Motors Sells 100 Sedans to Car Rental Agencies : Automobiles: The company will test the new vehicles with rental customers before putting them on the market in the United States.
Kia Motors North America said Monday that 100 of its new Sephia sedans have gone to rental-car service in Las Vegas.
The 100 cars are the first of 3,000 Kias that the company aims to import to the United States and sell to rental fleets before new models go on sale next year.
Budget Rent a Car, which received the first shipment two weeks ago, put the cars in service immediately, Kia Vice President Greg Warner said.
Kia Motors North America, the Irvine subsidiary of Korean auto maker Kia Motors Corp., said it is sticking to its strategy of testing the cars with rental customers to make sure they are right for the U.S. market before introducing them in showrooms in January. The plan will also give dealers a fresh supply of used Kias when they are returned from rental service in a year.
“We’re going to get feedback from the rental-car company with those consumers. Having those cars in a controlled environment allows us to iron out glitches,” Warner said.
It also might build a legion of Kia enthusiasts ready to snap up the new cars when they debut. Kia is hoping to compete with Japanese auto makers on low prices--the Sephia will list at less than $9,000--and on quality. For a number of years, Kia has built the Ford Festiva, which has been rated well on reliability.
In going the rental route, Kia is taking a strategic step that has been shunned lately by Detroit. The Big Three bought their own rental-car companies in the 1980s, thinking that they would be ready, dependable markets for their models. But the strategy flopped when consumers began clamoring for slightly used rental-car returns instead of brand-new cars, which sold for thousands more.
With Kia, Warner said, there will not be enough cars going into the rental market to dampen sales of new ones.
Nor will the hard driving to which rental cars are typically subjected be a problem, he said. The returned cars will only have 15,000 to 20,000 miles on them, and they will be well maintained: “The life of a rental car can be tough, but we’re confident about the durability of the cars.”
Kia Motors North America at a Glance
* Founded: 1991 * Headquarters: Irvine * Chief operating officer: Greg Warner * Employees: 13 * Parent company: Kia Motors Corp., Seoul, Korea, founded in 1944 * Products: It manufactures Ford Festiva. Its Sephia sedan is being sold to car-rental agencies. Its sport-utility vehicle is scheduled for release next summer.
Source: Kia Motors North America; Researched by JANICE L. JONES / Los Angeles Times
