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Kia Motors America is readying for a national rollout next year -- even as its parent struggles for survival at home in South Korea.

Kia now has 310 dealers in 31 states, covering about 65% of the U.S., said VP-Marketing Dick Macedo. The importer plans to add 100 dealers; by June '98 "we'll truly be a national company," Mr. Macedo said.

Kia started its U.S. push in February 1994 in 15 Western markets, and later expanded to the South. About two months ago, Kia began its eastern assault into markets including New York, Maryland and Virginia. It will enter remaining markets in the Midwest in '98.


Kia is about three years behind its original rollout goal to be a national player by the end of 1995.

The automaker plans to double its ad budget next year to support the national rollout, Mr. Macedo said.

He declined to discuss spending specifics, but Kia spent $8.3 million in the first half of 1997 and $26 million in all of '96, according to Competitive Media Reporting.

Mr. Macedo said the auto marketer will follow its traditional pattern of new-market launches, and retain Kia's tag "It's about time everyone had a well-made car."

Under that program, when Kia enters a market it starts with a two-week flight of a teaser commercial. The b&w spot shows a Godzilla-looking monster terrorizing a city. Then title cards appear: "There's only one thing more frightening to Japan. A well-made car for under $9,800."


Each dealer in the market gets an inflatable, 40-foot monster called Gorgo. Pre-launch radio spots report Gorgo sightings at Kia dealerships to drive traffic.

Brand ads appear in local newspapers on specific launch dates, which are always on Thursdays to build weekend traffic.

The debut is followed by humorous TV spots that combine brand and product by spoofing Kia's actual product testing via 200,000-mile endurance drives, car rental companies, college students and pizza delivery drivers. About 90% of Kia's media buy is TV.

"We've been so successful creating these real-world tests," said Fred Goldberg, president-CEO of Goldberg Moser O'Neill, San Francisco, which has handled the account since '93. The ads show "real-life situations and the way people really use their cars," he added.


Kia's new ads will stay true to the brand personality the agency helped create.

"The personality has always been 'We're friendly, we're approachable and we don't take ourselves as seriously as 99% of the other car companies out there,' " Mr. Goldberg said.

The average age of a Kia owner is 37, and about 60% are female; 20% are first-time buyers and 20% are more than 50 years old.

Prime competitors for its small Sephia car are the Honda Civic and Toyota Corolla, which are mentioned in TV spots. Sephia also competes with the Chevrolet Prizm, Ford Escort, Plymouth-Dodge Neon and Mazda Protege, Mr. Macedo said.

Rivals of Kia's Sportage sport- utility are Toyota's RAV4 and Honda's CR-V.

In South Korea, the marketer's troubled parent, Kia Group, plans to divest 23 of its 28 non-auto subsidiaries to satisfy creditors, who are owed more than $10 billion. Kia Motors Corp., its flagship subsidiary, filed for court protection from creditors in late September.

Mr. Macedo maintained it's business as usual in the U.S. for Kia, claiming that problems in South Korea have had virtually no impact on its U.S. operations.


The 1998 Sportage's arrival is a month behind schedule and the Sephia was delayed due to production problems. But he said the production woes were minor and have been rectified.

Production on 1998 model ads is due to start in Hawaii this week, he said, and '98 brochures for dealers are already done and the '98 models arrived early this month from South Korea.

Kia needs the U.S. market to prosper, and the brand has had a decent U.S. performance, said auto consultant George Peterson, president of AutoPacific, Santa Ana, Calif.

Despite Kia's limited model lineup, its sales during the first 10 months of 1997 rose to 45,077 vs. 30,821 during the same period a year ago. Kia expects to sell 25% more vehicles during '97 than last year's 36,274 and projects it will sell 100,000 vehicles in 1998.


Mr. Peterson said there's been speculation the Kia name could disappear -- that Korea's Samsung Group would take over Kia's car business and Daewoo Group would pick up its truck operations, and that they'd rename the car and truck brands.

"The question is will the problems [Kia is] having in their home country be so severe that it will preclude the guys here from following through on the things

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