Kia Soul becomes a hot seller

SEOUL -- Kia thinks it has found its soul.

The quirky, youth-oriented little car is being snapped up so fast in North America that execs at the Hyundai-owned brand here are trying to figure out how many more to make.

Kia thought it would sell 40,500 Souls in the U.S. and Canada in its first year on sale, which started about a month ago. Now, executives are studying whether they may need 10,000 or more additional cars, says Sung-Bok Lee, general manager of Kia's Americas team.

Soul could become the kind of high-impact hit that thus far has eluded Kia.

"It marks a new direction for the brand," says Jack Nerad, editorial director for Kelley Blue Book. "Kias have largely been bought strictly on their price/value position. Strong interest in the Soul, largely driven by styling, indicates they are turning the corner toward aspirational models that people will buy because of what they are, not their price."

Kia wants to shed its image as a maker of high-value, but mostly dull-looking vehicles. The goal is cutting-edge design to attract more upscale buyers.

With the Soul, "We target the younger generation," says Soon-Nam Lee, head of the overseas marketing group here at Kia headquarters. "The higher goal (is) to enhance the brand image."

The five-passenger Soul is stylish but still low priced. It starts at $13,995 including destination charges, and tops out at $18,595. Soul is rated at 31 miles a gallon on the highway with its base engine. The two Lees, who share a common South Korean name but aren't related, say the low price and upscale look will give Kia an edge in picking up market share during the recession.

Soul is being treated as a so-called halo car, an industry term for head-turning vehicles that bring customers into dealers' showrooms, even if they end up buying something else in the line.

Kia, Hyundai and Subaru were the only major automakers to eke out U.S sales gains in the first quarter vs. the same period last year. In Kia's case, it was 2.3%, better than Hyundai's 1.9%. The overall U.S. auto market was down 37.6%, Autodata says.

Some of Hyundai's success has come from its "Hyundai Assurance" program, which allows people who are laid off to return their cars without having their credit dinged. Ford and General Motors followed with similar programs. But not Kia. Soon-Nam Lee says Kia will find its own promotions but would not say what's in the works.

Kia is also picking up U.S. market share, which was 2.3% in the first quarter, Autodata figures show. He says the goal is to grow to 3.5% of the U.S. market for the year. "Even in a recession, we are investing in the marketing side."