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Kia Company

Kia Company

Kia Corporation, which was formerly known as Kia Motors Corporation and Kyungsung Precision Industry, is officially known as Kia Corporation. The name Kia in the company's name can be written and pronounced in many different ways in various languages, and the most popular multilinguistic names among all these names of the company are listed below:

  1. IPA: [ki.a]
  2. MR: Kia
  3. RR: Gia
  4. Hanja: 起亞
  5. and Korean: 기아

Kia Corporation or commonly known as Kia Company, is a South Korea-based Multinational Automobile maker company, and the headquarter of the company is located in Seoul, South Korea. Hyundai Motor Company, the largest automobile manufacturer in the country, is the parent company of Kia Corporation. Kia Corporation is the second-largest Multinational automobile manufacturer in South Korea, following Hyundai Motor Company. The market sector and customer attraction of the company are growing with time, and the sales of the company were over 2.8 million vehicles in 2019. According to a report from December 2015, Hyundai Motors Corporation was the major stakeholder in the Kia Company; the majority in the company with almost 34% stakes was held by Hyundai Company. The total stakes held by Hyundai Motors Corporation in the Kia Company were valued at USD 6 Billion at that time. In turn to this fact, Kia Corporation is also the major stakeholder in 20 subsidiaries of the Hyundai Motors Corporation, and stakes in all these subsidiaries range between 4.9% to 45.37%, with the total value of all these stakes standing over USD 8.3 Billion.

Kia Corporation: Etymology of Company's Name

The name of Kia company, which was Kyungsung Precision Industry and Kia Motors Corporation back then, was changed to Kia Corporation after many developments and scenarios in the company, and there was a reason behind shortening the name of the company. According to the officials of the company, "The name Kia was driven from the Sino-Korean Characters 起 (ki) and 亞 (a)." Following is the meaning of these character names from which the name of the company is obtained:

  1. 起 or ki, which stands for ???, meaning 'to arise'
  2. 亞 or a, which stands for 亞?亞, meaning 'Asia'

Combining the meaning of these two characters from the company's name, the company's name can be roughly translated as "Rising from Asia."

Kia Corporation: History

Origins and Early Expansion

On June 9, 1944, Kia Corporation was founded as a manufacturer of bicycle parts and steel tubing under the name 'Kyungsung Precision Industry', and this company also eventually produced the first domestic bicycle in South Korea. The name of South Korea's first domestic bicycle was 'the Samchully', and it was produced by Kyungsung Precision Industry in the year 1951. Following many strategies and development plans in the company, Kyungsung Precision Industry changed its name to Kia Corporation in the year 1952. After changing the name of the company, Kia Industry also started to build and produce two-wheelers and four-wheelers (cars) licensed by other companies. Following are some different types of vehicles produced by Kia Industries which are licensed by other companies:

  1. Trucks (in the year 1962) & cars (in the year 1974), and both of them were licensed by Mazda,
  2. Small Motorcycles, which were licensed by Honda, started producing in 1957
Kia Company

In 1974, after successfully working with these other companies' licensed vehicles, the company opened its Sohari Plant, which was the company's first integrated automotive assembly plant. The company's operations were affected when the new military dictator Chun Doo-hwan enforced industry consolidation in 1981, but before that, the company was successfully building and selling the small Mazda-based Brisa range of cars. This small Mazda-based Brisa range of cars manufactured and built by Kia was very popular in the automobile market of South Korea. But when the industry consolidation was enforced by South Korea's military dictator Chun Doo-hwan in 1981, Kia was forced to entirely focus on light trucks and give up the passenger cars business. Even after the enforced industry consolidation of 1981, Kia Corporation still managed to assemble a few more hundred cars in the next couple of years (1982 & 1983). But since the company was banned from officially building and manufacturing cars in the Korean market, the company built no passenger cars in 1984 and 1985.

As already mentioned, Kia Corporation was successfully manufacturing and building passenger cars before the forced shutdown of the business in 1981, and the company also managed to round out the passenger cars built by them with two other foreign assembled car models. Following are the names of the models that Kia Corporation managed to round out as the licensed vehicles from the other big automobile manufacturers in the market:

  1. Peugeot 604,
  2. Fiat 132,

The company was bounded by a contract for importing the above-listed two models and their technology for manufacturing these two models in their manufacturing hub. According to the contract, "Kia Corporation is allowed to import these models under their manufacturing hub as long as the company is exporting five cars manufactured by them for every single car of any of these two models imported by the company." The same contract was also applicable to the Hyundai Motors Corporation for importing these two international car models.

Kia Company

After two years of zero production of cars by the company because of the forced ban, Kia Corporation was again back in the car manufacturing business in partnership with Ford. The company re-joined the automobile market in 1986 and was only able to manufacture 26 cars in that year, but the company made a stronger comeback in the next year by producing over 95,000 cars in 1987. The number 95,000 was so huge at that time that it was one of the largest numbers of cars built by a single automaker company. When the company was back in the business, it was focused on growing its business in both domestic and international markets, and therefore, the company would export its cars to the international market as well. Following this strategy and development plan, the company started producing Mazda-based vehicles (especially cars) so that it could sell these vehicles to both Korea's domestic automobile market and the international vehicle market. Since the company was new to the international vehicle market, the company was positioned at the end position of the budget segment of the automobile sector.

The Mazada-derived models of the Kia Corporation, which were used for selling in Korea's domestic as well as international vehicle market, became very popular in a short period. Following are the names (along with the country name where the model was sold) of Kia Corporation's most popular Mazada-derived models, which were sold in the international vehicle market:

  1. Kia Pride: This was one of the most popular models produced by the company, and it was based on the Mazda 121. This model was sold to Australasia with the Ford Festiva name, and it was sold with its original name in North America.
  2. Avella: It was another popular car model produced by the Kia Corporation, and it was also Mazada-derived licensed model. This model was sold to Australasia with the Ford Aspire name, and it was sold with its original name in North America.

When the company's business started growing in the international market as well, the company started to incorporate many of its international subsidiaries in multiple countries to control their country-particular business. Kia Motors America was the first international subsidiary of the company, and it was incorporated in the USA (United States of America) in the year 1992. The first Kia Corporation's manufactured vehicles that were sold in the US were sold from four dealerships in Portland, Oregon, in the same year of incorporation of their American subsidiary. After making its presence in the American market as a multinational automaker company, Kia Corporation methodically expanded one region at a time. The dealers sold the Sephia in 1994, and after a few years of this deal, the United States segment of the company expanded its line with the Sportage. By the year 1995, the company owned more than 100 Kia Corporation dealerships across 30 states with a record selling of over 24,740 automobiles.

Takeover of the company by Hyundai Motors Corporation

In 1997, while facing an Asian financial crisis, Kia Corporation also declared itself bankrupt and started to look for investors and takeovers for the company. Finally, the company came to a common ground with Hyundai Motor Company, and according to this agreement of the company, the company agreed to diversify itself by the exchange of company ownership between these two companies. But Hyundai Motors Corporation was not the only automaker company that showed its interest in the company. Ford Motor Company was the other automaker company that was showing interest in the Kia Corporation since 1986, but Hyundai Motors Company outbid Ford Motors and acquired 51% stakes in the company. After further divestments made in the company, Hyundai Motors Company currently owns nearly one-third of the Kia Motors Corporation as per the agreement signed by both companies.

Kia Company

While Hyundai Motors Company remains the largest stakeholder in the Kia Motors Corporation, the Kia Corporation, in turn, is also the major stakeholder in 20 subsidiaries of the Hyundai Motors Corporation. Kia Corporation also started to focus on the European Automobile market since the beginning of 2005, and it also identified design as the company's "core future growth engine." This intensive focus of the company on the designs of its manufactured cars and their engines led to the hiring of Peter Schreyer in 2006 as a chief design officer. The chief design officer was specially hired to focus on the car's design that was specially designed for the European market, and with the hiring of him, the company also subsequently hired his creation of a new corporate grille known as the 'Tiger Nose'. The ground for Kia Motors Manufacturing Georgia, located in West Point, Georgia, was broken by Kia Motors America as the latter representing the company made a huge investment of USD 1 Billion in the Kia Motors Manufacturing Georgia. This was also a breakthrough in the market as Kia Motors Manufacturing Georgia was established in 2010 only (4 years after the huge investment made by the American subsidiary of the company). The particular reason behind the opening of the company's Georgia manufacturing subsidiary was predicted that the company was influenced by the fact that the American subsidiary of the company recorded its 15th consecutive year of increased US market share.

Kia Corporation: Subsidiaries and Affiliates

The Kia Corporation, in which Hyundai Motors Company held the major stake, is doing business in more than 35 countries all over the world. There are many subsidiaries of the company all over the world that are specially incorporated for handling the business of a particular region or country. Hyundai Motors Company was also holding a major stake in all these subsidiaries of the company, but all these subsidiaries are managing their business individually. Recently, the company has also incorporated one more subsidiary, which is specially designed to focus on the vehicles that are particularly designed for the defense sector. Following is the list of most popular subsidiaries of Kia Corporation, along with a brief description of them:

(1) Kia America:

The American subsidiary of the company, known as Kia America, was the first international subsidiary of the company, and it was incorporated in the year 1992. Kia American Corporation was incorporated on October 21, 1992, in California, America. This subsidiary of the company was incorporated to focus on the company's business in the American region (primarily in the USA). Currently, Kia American Corporation offers a complete line of vehicles manufactured by it in the United States through more than 755 dealers alone in the country, and its management department, KMA, is based in Irvine, California. In today's time, the company is offering all the latest models in the complete line of vehicles manufactured by it, but when it first came to the US automobile market, it only came with a limited number of models. Following is the name of the first two models that were introduced in the US automobile market in the year 1993:

  1. Kia Sportage,
  2. KIA Sephia

The Kia Corporation's model sales, as listed above, began in late 1993 (in the financial year 1994). The brand name of Kia Corporation of America is KMA, and the company is doing business successfully in the US and other American countries with the same name. In the year 2013, the American subsidiary of the company recorded its 18th consecutive year of increased US market share.

(2) Kia Central and South America:

This is actually a subsidiary which is not directly incorporated by the parent Kia Corporation company, but this subsidiary was incorporated because of the diversification of Kia American Corporation so that the company can better focus on 43 countries across Central and South America (including Brazil) and the Caribbean. The regional headquarter of this American-derived subsidiary is located in Miami, Florida (US).

(3) Kia Europe:

Kia Europe was the first subsidiary of the company that was incorporated to focus on its business in the European continent since the company has been selling its car in Europe since 1991. The Kia European Corporation was incorporated in Hauptstrasse 185, Eschborn (near Frankfurt) in the first half of 1991. When the company started its business in the European market in 1991, the company only sold the Pride supermini model first, and it was a rebadged version of the company's manufactured Mazada 121 of the late 1980s. By the end of that year, this model of the company became very popular in the European automobile market, and the company managed to sell nearly 1,800 Prides in the United Kingdom (UK) alone. The figure for the sales also increased in the next year (almost doubled in 1992), and increased to 5500 units in 1993. This figure indicated that the company was growing in the United Kingdom and the whole European automobile market. But by the end of that decade, the company's sales started falling, not only in the UK but also in the whole European automobile market.

But there was one more interesting fact at that time; the company didn't have any plants in Europe. Till 2006, the company was exporting all the vehicles from many other plants located at different locations worldwide (especially from America and Korea). It was only 2006 when the company opened its first own plant in Europe at the cost of approximately EUR 1.7 billion in Žilina, Slovakia, in the village of Tepli?ka nad Váhom, and that's how it became the European subsidiary of the company.

(4) Kia India:

Kia entered the Indian automobile market in 2019 only, even though it has been manufacturing vehicles for the past six to seven decades. With the Made for India SUV- SP2 Concept, the company entered the Indian market in July 2019 and incorporated its Indian subsidiary known as Kia Indian Corporation. To produce more units very easily for the Indian market, the company built its own Indian plant as the production facility on a Greenfield land near Penukonda in the Anantpur district, Andhra Pradesh. This became the Indian subsidiary of the Kia Corporation with the Kia India name, and it has the capacity to produce 3 lakh vehicle units annually. Kookhyun Shim was appointed by the company as the MD & CEO of the Indian subsidiary of the company. In his new position in the company, Kookhyun Shim manages and plays a leading role in ensuring that KI's (Kia India) schedule of operations and projected timeline is achieved successfully. Kia India sold more than 1 lakh cars in the Indian automobile market as of July 31st, 2020, and became the first car manufacturer to achieve this number in such a short period.

(5) Kia Defense:

The automaker company is also one of the specialized automobile manufacturers that have its specialized arm for manufacturing defense equipment with multiple variants and other transport equipment associated with the defense services. Kia Corporation is also the sole maker of defense and other associated transport equipment with multiple variants in South Korea, and it has been supplying them to the South Korean Government since 1976. Kia Corporation has got a license from the US government for manufacturing the latest defense equipment, and with this design license, it is currently designing a Kaiser Jeep M715-type vehicle named the KM450 for the South Korean Army. The defense subsidiary of the company is also the owner of the former ex-Asia Motors factory, which was located in Gwangju City, South Korea.

There are many other subsidiaries of Kia Corporation as well, which are handling the business of the company all over the world as well as in many different automobile sectors, but only these subsidiaries of the company are the most popular and generate the most revenue of the company in recent years.

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