Hyundai Motors and Kia Motors are a powerful combination,
and their rising sales reflect it. But like sack race runners,
the South Korean auto makers need to work together or risk
tripping over their own feet.
Hyundai bought a controlling interest in Kia in 1998, but has
been steadily divesting over the years and now holds a 34% stake.
The two companies are still closely linked, sharing platforms,
powertrains, and a joint research center.
Since 2005, they've maintained their own marketing operations
and tried to differentiate their brands. Hyundai is aiming for a
"modern and premium" brand
, while Kia is supposed to be more "sporty."
The strategy has paid off in increased sales. According to
Bloomberg, the two companies
sold a record number of vehicles in 2011
, and Motor Trend reports equally strong sales in January 2012.
Kia sales are up 27.8%
, with 35,517 units sold while Hyundai sales are up 15% with
42,694 units sold. Both companies are leading with their
mid-sized sedans, the Kia Optima or the Hyundai Sonata.
Or is it the other way around? That's the problem facing the
combined companies -- despite efforts at differentiation, their
cars are still competing head-to-head, and some of Kia's growth
is coming at Hyundai's expense. That's a conflict the two
companies are going to have to work out, and soon.
Kia and Hyundai do not trade in the U.S., but both companies
are represented in the First Trust NASDAQ Global Auto ETF (
) and the iShares MSCI South Korea Index ETF (