Automotive News - July 28, 2008 - (Page 22) 22 • JULY 28, 2008 Kia launches Borrego just as SUVs lose favor Rick Kranz rkranz@crain.com Kia spends big to launch Borrego Rick Kranz rkranz@crain.com CLE ELUM, Wash. — Is this an opportunity or a case of bad timing? Kia is launching its mid-sized 2009 Borrego as the market for SUVs is collapsing. “There is some migration from fullsized to mid-sized (SUVs), which we think plays well for the Kia brand,” Tom Loveless, Kia Motors America’s vice president of sales, said at a press event here. “For us, it is an opportunity to enter a segment where we have never been, and it is also an opportunity to go after a consumer that we really haven’t had access to.” Car sales got you down? Let accessory sales pick you up! Learn the art of developing a successful, dedicated accessory sales department. • • • • • Let our professionals help you avoid brick walls with over 20 years of hands-on, proven experience. Add $55,000 to $200,000 (or more!) to your bottom line each month. Enjoy a turn-key, CSI-friendly program, tailored for your store. Learn how to obtain the industry’s best products within 3 days from one simple phone call! Buy the finest accessories at or below manufacturer’s wholesale prices. “In 2007, our Aftermarket Sales Department earned $138,000 per month on average.” --Tony Pack, VP, Five Star Ford For a free evaluation Visit us at www.msst.us Or call us at 877.615.1222 Translation: The Borrego is Kia’s most expensive vehicle, aimed at consumers who spend $27,000 to $40,000-plus for such SUVs as the Nissan Pathfinder, Toyota 4Runner, Ford Explorer or Jeep Grand Cherokee. Previously, the Amanti sedan, starting at $26,220 including shipping, was the most expensive model. The basics: The Borrego is a sevenpassenger, mid-sized SUV on a bodyon-frame chassis that Kia expected to use for a pickup. The pickup program has been canceled. Kia advertising touts the Borrego’s value, noting its luxury amenities and its list of standard equipment that is optional on some other mid-sized SUVs. The list includes LED turn signals in the side mirrors and a backup feature that warns if a child or object is behind the vehicle. The steering column electronically telescopes in and out and up and down. The V-8 version has a standard driver’s knee airbag under the instrument panel. Optional four-wheel drive comes with a hill-climbing feature that prevents the vehicle from rolling backward. The brake system helps control the vehicle when descending steep grades. Kia also hopes to woo buyers with the Borrego’s towing capability. The 276-hp 3.8-liter V-6 version can tow as much as 5,000 pounds, while the 337-hp 4.6-liter V-8 can tow 7,500 pounds. Notable features: Sixteen air conditioning/heating vents; the seat back for the second row folds forward, and the entire seat moves forward to provide easier access to the third row; USB and auxiliary input jack. The Borrego is Kia’s most expensive vehicle, with a base price of $26,995. Borrego: Brawn — and 21 mpg Kia’s mid-sized Borrego SUV boasts more horsepower and better fuel economy than the 2008 Ford Explorer. 2009 KIA BORREGO 2008 FORD EXPLORER Wheelbase Length Width Height Base engine Horsepower Torque, in lbs.-ft. EPA mpg* Transmission Base price** * 2wd model ** Includes shipping 114.0 in. 192.3 in. 75.4 in. 71.3 in. 3.8-liter V-6 276 @ 6,000 rpm 267 @4,400 rpm 17 city/21 hwy. 5-speed automatic $26,995 113.7 in. 193.4 in. 73.7 in. 72.8 in. 4.0-liter V-6 210 @ 5,100 rpm 254 @ 3,700 rpm 14 city/20 hwy. 5-speed automatic $26,495 What Kia says: In clinics, “midsized SUV intenders were saying, ‘I would be very proud to be seen in this car,’ ” says Tim Chaney, Kia Motors America’s marketing director. “There is no apologizing. It blew away their notion of what Kia was about in terms of features, amenities and quality.” Nuts and bolts: The Borrego is assembled in Korea. A Hyundai-Kia engineered five-speed automatic transmission is standard with the V-6; a ZF six-speed automatic comes with the V-8. BorgWarner developed the fulltime, torque-on-demand system. U.S. sales began this month. Compromises and shortcomings: Road surfaces can be an issue. Moderate imperfections in some roads at interstate speeds sometimes translated into vibrations through the steering column. Additionally, a few times on these surfaces, two hands sometimes were needed on the steering wheel to keep the vehicle heading in the direction the driver intended. The skinny: The Borrego is a powerful, quiet, mid-sized SUV with a large interior and towing capacity for a large boat. But the Borrego is a work in progress with some tweaks needed to make the driver happy and confident about the vehicle. c CLE ELUM, Wash. — As SUV sales tank because of high gasoline prices, Kia is rolling out the 2009 Borrego SUV, the automaker’s most expensive introduction in its U.S. history. “This will be our largest launch ever in terms of marketing to the customer and media spend,” said Tim Chaney, Kia Motors America’s marketing director. The seven-passenger Borrego is a mid-sized, body-on-frame SUV. Sales began this month with prices starting at $26,995, including shipping, for the V-6, two-wheel-drive version. A fully loaded V-8 Borrego stickers for about $38,000. For calendar 2008, Kia boosted the marketing and advertising budget for U.S. vehicles 30 percent from last year, Chaney said. He would not disclose amounts. Last year Kia spent $187 million, according to Advertising Age, a sister publication to Automotive News. A 30 percent increase would be $56 million, or a budget of $243 million. He said 20 percent of that budget is allocated for the Borrego. That would equate to $48.6 million. Chaney was interviewed during a press event here this month. “A new kind of luxury SUV” is the advertising tag line. Although the Borrego is not a luxury vehicle, “we have a vehicle that can be compared against luxury SUVs” in terms of features, and “we have the value equation working for us,” Chaney said. Ads in movie theaters started June 27 and will continue until Aug. 7. TV advertising runs from August through October. Borrego ads are planned next month during the opening ceremonies for the Summer Olympics in Beijing. c FROM 0 TO100 IN UNDER 30 SECONDS! Non-Recourse Financing Detroit 3: Goodbye, bailouts Robert Sherefkin rsherefkin@crain.com Turndowns in reserve money paid to dealers since 1999 We approve every customer in writing in 30 seconds or less… so you can convert your turndowns into approvals and sales. Our Guaranteed Credit Approval Program allows you to eliminate customer turndowns and provides 3 different financing programs to meet your customers’ needs and your profit requirements. Isn’t it time you got on the road to capturing incremental business from a growing sub-prime market with Credit Acceptance? NASDAQ: CACC Changing lives since 1972. creditacceptance.com or 1-800-873-0512 DETROIT — At first, the Detroit 3 agreed to nurse the small plastic-trim supplier through bankruptcy. Then they realized that the company’s precarious status threatened the launch of several models, including fuel-efficient cars they desperately need. Over the Fourth of July weekend, all three automakers jumped into action, moving their production tools from the bankrupt Canadian company to more stable suppliers. Ford Motor Co. alone marshaled more than 200 trucks to move its tools. The case of Progressive Molded Products Inc. shows that the Detroit 3 are reacting faster when troubled suppliers threaten their production lines. This time the automakers were determined not to be stuck in a long and expensive wind-down, as they were earlier this year with Plastech Engineered Products Inc. It also indicates that the carmakers’ top priority in choosing suppliers may be shifting from price to financial stability. Rather than supporting smaller suppliers that offer lower prices, they may be favoring larger suppliers that are less likely to get in trouble and put vehicle production at risk. Call it a flight to safety. On June 20, Progressive filed for bankruptcy protection, the third plastic-trim supplier to do so since Feb. 1. Four days later, a company attorney told the U.S. Bankruptcy Court in Delaware that the Detroit 3 agreed to fund $12.7 million of the total that Progressive needed for initial production, according to court documents. In 2001, the Concord, Ontario, company was a General Motors supplier of the year. Progressive expected 2008 sales to exceed $500 million. About 90 percent of its 2007 revenue came from GM and Ford. But Boston buyout firm Thomas H. Lee Partners LP’s 2004 purchase of Progressive added $500 million in debt. Reversing its initial support for Progressive, on June 27 GM asked for court approval to seize tools from the supplier. Ford and Chrysler LLC followed with similar requests. Progressive supplied the Chevrolet Malibu sedan and Buick Enclave, Chevrolet Traverse, GMC Acadia and Saturn Outlook crossovers. Malibu, Enclave and Acadia first-half sales rose in a dreadful market. The Traverse hasn’t launched. GM feared that the supplier would run out of cash beyond June 30, a GM spokeswoman said. So GM purchasing chief Bo Andersson and his team worked around the clock shepherding the automaker’s tooling to alternative suppliers. Ford was launching its Flex crossover and Lincoln MKS sedan when Progressive sought bankruptcy, spokesman Todd Nissen said. Ford moved its tools to new supplier plants in time to resume production when Ford plants came back on line in mid-July, Nissen said. Big suppliers tend to be the winners as Detroit 3 tools find new homes. They include Johnson Controls Inc., Magna International Inc. and NYX Inc., insiders say. Ford’s Nissen said: “We are shifting toward a smaller number of financially stable companies.” Progressive is “disappointed and regrets that this is the way events unfolded,” said spokesman Michael Daniher. “Another outcome was possible and doable.” c http://www.msst.us http://www.msst.us http://creditacceptance.com http://creditacceptance.com
Table of Contents Feed for the Digital Edition of Automotive News - July 28, 2008 Automotive News - July 28, 2008 A scared-stiff industry stomps on the brakes No-lease edict stuns Chrysler dealers Hummer: Bonuses, buyouts Amid the gloom, Mercury celebrates Ford banks on Mulally's small-car plan PACE awards open for innovative suppliers GM expands employee discount plan through July American Axle blames strike for big quarterly loss Mercedes expects U.S. sales to fall; B class may come in 2011 Chevy plans new U.S. subcompact by '11 GM or Reynolds? Dealers must decide now Ralph Kisiel Ghosn: It's wrong time for a new partner GM geniuses turned their auto dreams into realities Dealers fresh out of Mini Coopers Chrysler, Ford, Honda top NAACP report card GM alters bonus for dealers who outperform their region Automakers angle for Chrysler's idle engine plant Chrysler revokes franchises in Pa. Sonic-Mercedes case could allow big dealers to add stores Buick's new LaCrosse It's still true: Product is king Still a bad idea NHTSA's Nason is leaving some big jobs undone Don't advertise them until they're on sale Safety matters much more than mpg Chrysler's no 'fuel economy laggard' $4 gas won't turn the U.S. into Europe For Europeans, America still spells opportunity Challenges travel with OnStar to China Personnel Mexico sales rise 1.2% in June Picture this Europe's worst sales result? Toyota Kia spends big to launch Borrego Kia launches Borrego just as SUVs lose favor Detroit 3: Goodbye, bailouts Dealers Eaton: Supercharger sales will grow Fla. appeals panel overturns class status in Kia brake suit Audi certified push pays off Used-car rule goes to the shop for tuneup Big-truck prices take a tumble in June Automaker tax break piggybacks on mortgage bill Honda rides high in 2nd-quarter rankings Ford Credit takes a hit as truck values fall 100 years of the Tin Lizzie Lamborghini profit soars AutoNation net income falls GM names CFO for N.A. TI Automotive unit will move Mercedes to cut Ala. production Fleming was a consummate newspaperman Toyota plans to raise Prius output A dart for Smart Tesla gets good reviews at Bentley 422 hp — and, uh, easy at the pump Ford's 2nd qtr: The reddest ink ever Bill Gates joins the car-dealer club Detroit 3 should put Mini under the microscope What's a Gov. to drive? Automotive News - July 28, 2008 Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 1) Automotive News - July 28, 2008 - Hummer: Bonuses, buyouts (Page 2) Automotive News - July 28, 2008 - American Axle blames strike for big quarterly loss (Page 3) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 4) Automotive News - July 28, 2008 - GM or Reynolds? Dealers must decide now Ralph Kisiel (Page 5) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 6) Automotive News - July 28, 2008 - GM alters bonus for dealers who outperform their region (Page 7) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 8) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 9) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 10) Automotive News - July 28, 2008 - Buick's new LaCrosse (Page 11) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 12) Automotive News - July 28, 2008 - Chrysler's no 'fuel economy laggard' (Page 13) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 14) Automotive News - July 28, 2008 - For Europeans, America still spells opportunity (Page 15) Automotive News - July 28, 2008 - Personnel (Page 16) Automotive News - July 28, 2008 - Personnel (Page 17) Automotive News - July 28, 2008 - Picture this (Page 18) Automotive News - July 28, 2008 - Picture this (Page 19) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 20) Automotive News - July 28, 2008 - Europe's worst sales result? Toyota (Page 21) Automotive News - July 28, 2008 - Detroit 3: Goodbye, bailouts (Page 22) Automotive News - July 28, 2008 - Dealers (Page 23) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 24) Automotive News - July 28, 2008 - Fla. appeals panel overturns class status in Kia brake suit (Page 25) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 26) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 27) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 28) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 29) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 30) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 31) Automotive News - July 28, 2008 - Big-truck prices take a tumble in June (Page 32) Automotive News - July 28, 2008 - Honda rides high in 2nd-quarter rankings (Page 33) Automotive News - July 28, 2008 - 100 years of the Tin Lizzie (Page 34) Automotive News - July 28, 2008 - Mercedes to cut Ala. production (Page 35) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 36) Automotive News - July 28, 2008 - Toyota plans to raise Prius output (Page 37) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 38) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 39) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 40) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 41) Automotive News - July 28, 2008 - What's a Gov. to drive? (Page 42)
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.