Kia’s Next Step Is To Crush Nissan In The United States

Sun Tzu once wrote that “Strategy without tactics is the slowest route to victory,” whereas tactics without any strategy is “the noise before the defeat.” I cannot articulate the strategy of every brand at the moment, but there do seem to be two obvious paths: Maintain some semblance of margin until the world stabilizes, or try to gain market share while others retreat. I think I know which strategy Kia is planning, and it’s the slow route to dominance.

Speaking of, The Morning Dump has been dominated by politics lately, and I’m not super into it today. While it’s important to not ignore politics, it’s alright to take a mental health day. Today is such a day. If you want to read about politics, there’s the President saying he wants Elon Musk’s companies to thrive after claiming he could easily destroy them; Japan admitting there’s no paperwork on the trade deal, and that much of what the Trump administration bragged about isn’t likely to happen; and the Treasury Secretary saying that Detroit automakers are “cool with” giving Japanese automakers a better deal than American automakers are getting.

It’s a totally normal time we’re living in, right? That aside, I’m interested in other things today. General Motors has lately managed to avoid the harsh warranty costs Ford has faced, but the complications of modern cars are catching up with GM, too. Ford doesn’t love doing that warranty work either, which is why the story of one mechanic is so endearing.

How do I pump myself up for a Friday? Simple, with the Tour de France Femme… chase vehicles. The bikes are fine, the cars are amazing.

Kia Joins Ford In Going After Market Share

I was ready to charge 200 mph into my breakdown of Kia’s strategy, and then I found this photo. It’s the Kia Pride “Shout.” This was a, I think, UK-only version of the Ford-Mazda-Kia small car project that also birthed the Festiva and 121. It appears to be a normal 1.3LX with tiny five-spoke wheels, Clarion radio, and a bodykit. I now want to import one of these, which is a silly thing to want, and more indication that I am a silly person.

Not to get all Art of War on you today, but you don’t interrupt your enemy when they’re making a mistake. While I don’t know that anyone at Kia is so cutthroat as to revel in the diminishment of its usual rivals (whereas some brands have historically called out the automakers they were gunning for), I haven’t seen any evidence that the Korean brand is actively trying to make life easier for Volkswagen, Mazda, Mitsubishi, or especially Nissan. The reorganization of Nissan could be viewed as a strategic retreat, and there’s no easy way that a cash-starved Nissan can simultaneously cut capacity, raise capital, and also increase market share.

Kia is in a different position. While it has significant exposure to tariffs, the brand is part of the successful Hyundai Motor Group. Being a Korean brand also has its benefits as the position of the Korean won is down relative to the US dollar. For an exporter, that’s the way you want it.

So Kia, like Ford, is going for it. What does that mean?

Here’s the company explaining it, via Reuters:

[Kia] said it aimed to increase its U.S. sales by 7% to 8% in the second half of the year even as overall auto sales in the U.S. market are expected to slump by 10%, leading to a gain in market share to over 6% from 5.1% in the first half.

It expects Carnival and K4 small car sales to drive the gains while some Japanese automakers are raising prices.

While Kia and Hyundai import about two-thirds sold in the U.S. market, making them more exposed to U.S. tariffs than major rivals, Kia said on Friday that it has not yet made detailed plans to raise prices, instead focusing on growing its U.S. business.

“We believe that we will be able to use the difficult environment as a good opportunity to level up (our market share and sales), and that’s Kia’s strength,” Kia chief financial officer Kim Seung-jun said during a conference call.

After I write this, I’m going to get a Kia Carnival Hybrid for a weeklong adventure/camping trip, so Thomas will be at the helm of TMD. I am ecstatic, to put it mildly. I love the non-hybrid Carnival, so I’m already in the bag for this version. I feel about this the way I used to feel about getting a Corvette, just to yet again establish where I’m at as a human being.

Also, to Kia’s point, I’m starting to see a lot of Kia K4s on the road, and the K4 Hatch looks incredible.

Kia deciding not to raise prices is the clearest sign it thinks it has the right products and can absorb a tariff hit/thinks South Korea is close to a deal. Through the first half of the year, Kia sales are up 7.8% to 386,460 vehicles, which puts it behind Nissan at the moment. I’m not sure that the company can make up 80,000 sales in a shrinking market, but every little bit it cuts out of Nissan is a victory. The company is already ahead of Subaru by a significant margin, as well as Mazda and Mitsubishi.

Hyundai Motor Group is also in a position to do two strategies at once, by slightly raising prices on Hyundai while mopping up sales with Kia.

GM Pays The Price For V8 Failures

The massive issues with the GM L87 6.2-liter V8 have been well-documented here and, mostly, have represented a departure from the experience of many GM customers. After the company’s massive Ignition Switch Defect Nightmare, CEO Mary Barra has made avoiding another headline-making recall a priority. She has been, on the scale of Detroit automakers, successful.

No one bats 1.000 for long, and as the Detroit Free Press explains, CFO Paul Jacobson recognizes it’s something GM needs to prevent from happening again:

Warranty costs from recalls comprised the second largest expense eating into General Motors’ profits this past quarter after tariffs, CFO Paul Jacobson said July 22.

Expenses related to its 6.2-liter V-8 engine issues and higher claims due to software issues from electric vehicles that launched in the past few years increased by $300 million compared with warranty costs last year, Jacobson told shareholders.

“Let me be clear, we are not happy with our warranty trend and are facing these challenges head-on with the top priority always being our customers,” Jacobson said after the company reported a plunge of $1.1 billion in earnings for the second quarter that the automaker attributed to tariff costs. “We provided extended warranties in some instances and (have) taken other proactive steps to support those affected, including shifting some supply of our components to our after-sales group to decrease repair times.”

General Motors has a long way to go to catch up to Ford in terms of warranty repair expenses.

Wallet Returned To Ford Worker After 11 Years

Ok, this story of a Ford employee inspecting cars and leaving a wallet in an airbox for more than a decade is inadvertently pointed after what I said above about manufacturing issues. That was not my intention. It’s just a story with a happy ending:

The wallet traveled 150,000 miles hidden in the engine bay of a 2015 Ford Edge until Chad Volk pulled out the airbox to replace the cooling fans. Volk, who owns LC Car Care, was surprised to find a well-worn Ford employee ID tucked inside with some cash and $250 in Cabela’s gift cards.

Using Facebook, Volk was able to locate and contact the man on the card, Richard Guilford, in Michigan.

The best part of this tale is that Cabela’s will recognize the gift cards, which were supposed to be used for Christmas gifts. That’s great.

It’s Friday, So Here’s A Škoda

I am ending my week on the highest note possible. This is Whitney Houston at the top of the range. I’m talking about the Tour de France Femmes avec Zwift, which will feature 32 electric or plug-in hybrid Škodas.

I love that for them.

Here’s how Škoda describes their participation:

From 26 July to 3 August, a total of 154 riders in 22 teams will set off on a route that is longer and more demanding than ever: 1,165 kilometres across nine stages, traversing France from Brittany in the west to the Alps in the east.

This year’s course includes sections through the Massif Central and the Savoie Alps, with riders tackling a record total ascent of 17,240 metres. Škoda Auto will provide the organisers with a fleet of 32 fully electric and plug-in hybrid vehicles.

Race Director Marion Rousse will oversee the event from her ‘Red Car’, a new all-electric Enyaq.

That’s the good stuff.

What I’m Listening To While Writing TMD

This is my mood for the rest of the week. It’s Kenny Loggins doing “I’m Alright” from Caddyshack. Have a great week. If you need some help, please reach out to Thomas in the Discord or David via email.

The Big Question

What is the best Korean car of all time?

Top graphic images: Kia; Nissan