Kia COO: Stable Sales Can Buffer Tariff Impact

According to foreign media reports, Steve Center, COO of Kia America, recently stated in an interview that as long as consumers continue to purchase cars, the impact of tariffs on Kia and its dealers will not be too difficult to bear.

He also said, "Since the supply chains and assembly layouts of each manufacturer vary, the impact of tariffs on each company will also differ. In the case of Kia, the impact of tariffs is within manageable limits."

Center further emphasized, "As long as market demand remains resilient, the issue of tariff costs is not a major concern, and we have prepared multiple contingency plans." He specifically pointed out that compared to direct cost pressures, it is more important to be vigilant about the indirect effects of tariff policies on the economy.

Stable sales combined with moderate promotional investments will help Kia absorb some of the costs. Center stated, "Kia's promotional spending is at a low level, so the company can use some common business tactics to gain market share and achieve the desired sales volume."

Kia has positioned Georgia, US, as the assembly center for many of its popular car models, giving it a favorable position under the new tariff policy. This production site is responsible for manufacturing several of Kia's most-traded car models, including the Sportage compact SUV, the three-row Telluride SUV, as well as the EV6 SUV and the three-row EV9.

However, the highly popular new K4 sedan, launched by Kia in August 2024, is assembled in Mexico. Later this year, the hatchback version of the K4 will also begin production in Mexico. In Q1 of this year, Kia sold over 37,000 units of the K4 sedan, driving the brand's overall sales to a record high. This model ranked second in sales within the Kia brand, only behind the Sportage SUV.

Currently, Kia has not made a clear statement on whether it will shift production capacity to the US to avoid tariffs.

Center said, "We will monitor whether these tariffs will be implemented or suspended, how much they will affect us this year, and how much they might cost, and then figure out how to allocate these costs."

The new US tariff policy has brought challenges to the entire automotive industry, forcing companies to increase vehicle prices and adjust their model lineups, while companies are reluctant to raise prices across the board, hoping to maintain the competitiveness of their product portfolios.

Center said, "Automakers cannot remove certain models from their product lineups because the original intention of building the product line was to cover the needs of consumers at different stages of life."

In addition to advising dealers not to focus too much on the news, the main message Center conveyed to them was, "We can handle this situation."

He said, "We will see how much costs will increase, how much we can bear, and how much we must pass on to consumers."