Korean Automakers Quietly Optimistic at Detroit Car Show

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Korean Automakers Quietly Optimistic at Detroit Car Show

DETROIT - There was an austerity mood at the stands of Korean automakers at this year's North American International Auto Show, which opened its doors to the public on Saturday.

Although their displays lacked the concept cars and the razzle dazzle of many of their competitors, the Korean trio of Hyundai, Kia and Daewoo didn't need smoke, mirrors and laser light shows to show that they are on a roll in the U.S. market.

Despite the gathering clouds on the American horizon and all the talk in Korea of economic gloom and doom, Hyundai, Kia and Daewoo have high hopes and stakes pinned on the United States, which has become their biggest and fastest-growing foreign market. Korean automakers sold about 472,650 units in America in 2000; this year, they are aiming for 640,000 units, a 35 percent increase.

While Hyundai Motor Co. tries to extend its reach in America with new upmarket products like the XG and Santa Fe, Kia and Daewoo will be soldiering along, doing what they know best: building and selling entry-level cars.

"Nobody can compete against those guys," said GM's chairman, Jack Smith. "They have the bottom of the market," he acknowledged.

Bottom feeder Kia unveiled its Rio subcompact wagon at the Detroit show on Tuesday, the first of three new models it's bringing to the American shores this year. While prices were not announced, the Rio would be the lowest-priced wagon in the U.S. market, said Dick Macedo, vice president of sales and marketing for Kia Motors America.

Mr. Macedo said the Rio wagon would be priced slightly above the Rio sedan, which has a sticker price of $8,895 and would undercut its primary competitor, the Suzuki Esteem wagon, which retails for $13,699. The stylish wedge-shaped wagon is aimed primarily at female buyers with children and arrives in U.S. dealer showrooms in mid-June. Combined U.S. sales of the Rio sedan and wagon are projected to reach 50,000 units this year, with the wagon accounting for about 20 percent, or 10,000 units.

Kia's sales target for the year is 220,000 units, a 37 percent increase over last year's 160,000 units, Kia's best year ever.

Mr. Macedo pointed out that Kia's U.S. sales already have surpassed such well-known marks as Audi, Isuzu, Saab and Infiniti. Riding on a 95-inch wheelbase, the Rio wagon is powered by a 1.5-liter DOHC engine that produces a peak output of 96hp at 5,800 rpm. Options include a four-speed automatic transmission, antilock brakes, alloy wheels and a premium audio system.

The Hyundai Motor stand was conspicuously quiet. The company was among the very few exhibitors at the North American International Auto Show that chose not to offer any new products. Hyundai officials are holding back for next month's Chicago auto show. The thinking is that Hyundai cannot compete so effectively for media coverage against the hometown favorites GM, Ford and DaimlerChrysler which spend vast sums on concept cars and courting the media and the public at the Detroit show. Hyundai won't be lost in the clutter at the Chicago show so it could unveil either the new Sonata or new Tiburon coupe, or even possibly both.

Late last year, the company augmented its U.S. model range with the Grandeur XG and Santa Fe, bringing the lineup to six models: Accent, Elantra, Sonata, XG, Santa Fe and Tiburon Coupe. Hyundai is looking to pass the magical 300,000 sales mark this year, up from the 244,391 units sold in 2000.

Much of the growth momentum will come from the two recently introduced models, the Santa Fe and Grandeur XG, which is sold under the XG300 name in America. Hyundai's dealers there can't get enough Santa Fe units because demand is outstripping supply. Hyundai is confident it can sell 50,000 units of the Santa Fe in the U.S. this year. Targets for the XG300, which competes in the exceedingly tough premium mid-size segment, are far more modest: 15,000 units.

Production delays on a new six-cylinder engine have postponed the U.S. introduction of the face-lifted Daewoo Leganza until next year. The Daewoo-designed powerplant is an inline six-cylinder mounted transversely, an unusual configuration for an I-6. According to Daewoo, the engine - code-named XS6 - features an all-aluminum cylinder head and an alloy block weighing 298 pounds. Mated to a continuously variable transmission, the 180-hp 2.5-liter engine would replace the current four-cylinder. The new engine will be Ultra Low Emission Vehicle compliant.

The in-line six-cylinder Leganza will be priced at under $20,000, the same as the current four-cylinder Leganaza, and will feature a high level of trim. Daewoo customers also will have to wait until summer 2002 for the Rezzo wedge-shaped MPV, which is powered by a 2-liter DOHC engine producing 129 hp. It's tentatively badged as the U100 for the U.S. market. The European-inspired five-seater features a Porsche-tuned suspension. Pricing is expected to be under $16,000.

Unfazed by the bankruptcy of its South Korean parent, Daewoo Motor America is looking to nearly double its sales in 2001 by continuing with the current model lineup. The lineup includes the Lanos subcompact, Nubira compact (available in sedan and wagon editions) and the Leganza mid-sized sedan. The company posted 122 percent growth in 2000 with sales of 68,260 units and is looking to reach 120,000 this year.

by Oles Gadacz

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