2004 Chicago Auto Show, Part III

February 3, 2004

2004 Chicago Auto Show Index (2/3/2004)

Mojave States Kia’s Pickup Dreams

2004 Kia Mojave concept

2004 Kia Mojave concept

Kia thinks it has a product fit to compete with the best small pickups in America sooner rather than later. The only problem is there is no place to build it. The Korean automaker unveiled a body-on-frame concept truck called Mojave Thursday at the Chicago Auto Show, saying that the Kia Sorento-based truck is near production ready, but no existing Hyundai production facility is "suitable" to build it, according to Kia Motors of America CEO Peter Butterfield.

Hyundai Motor Co, which owns Kia, plans to have its first U.S. plant in Alabama on line by March 2005 with output potential slated to reach 300,000 units annually by 2007. Butterfield says that “it’s only logical to make (the truck) in America because of import taxes,” but Hyundai has given Butterfield no commitment to making room for Kia’s truck in Alabama as of the Thursday press conference.

Hyundai’s top brass are reportedly planning to expand its truck lineup with mid-size SUVs in coming years in order to reach ambitious global and U.S. sales goals. It currently sells Kia’s sport-utility and minivan here in addition to Hyundai’s Santa Fe, and will start selling two mini-utes — the redesigned Kia Sportage and the new Hyundai Tucson — later this year. Hyundai’s U.S. execs have stated the need for a pickup several times in recent years.

The Kia truck could be relatively simple and cost-effective to build, according Clive Hawkins, who heads Aria, the Irvine, Calif., fabricating shop that crafted Kia’s concept truck. Aria basically tore the sheetmetal off a stock Sorento, which is body-on-frame, lengthened the chassis a foot and went to work building off of Kia’s design for the concept.

Kia will now gauge consumer reaction at the Chicago show and stage focus clinics on the Mojave’s size and styling in order to help the company decide whether or not to produce the vehicle. Consumers and show-goers will have plenty of “delight factor” to react to, according to Hawkins. He says that even though Kia told his firm to keep the overall construction simple and producible, Hawkins was given latitude to include wow factor. The truck has a bed extender feature that allows drivers to stretch the rear bed 15 inches into the cabin. Also, there is no gaping seam between the tailgate and the bed.

One thing is for certain when it comes to Kia's product plans: It will sell its redesigned 2004 Spectra for $12,620, or two percent more than the outgoing model. Butterfield said that there is about $1000 more content on the vehicle. —John D. Stoll

Scion Expands Sales Network

Scion, Toyota’s youth brand, has now expanded out behind its original base in California and as of this month is now on sale in 20 different states, stretching from Maine down the East Coast to Florida and West to Texas.

“Our sales numbers are going to jump from 1500 per month to around 5000 per month,” predicted Jim Farley, Scion’s general manager. Farley added Scion now has 50 dealerships up and running and is shooting for sales of around 75,000 units this year. It could be or it could be less, he added.

Farley also said the Scion xB model remains the best-selling Scion and now accounts for 75 percent of all Scion sales. But Scion is scheduled to add a third model in June, Farley said. Farley added the average age of the Scion buyers remains in the 30s but Toyota is satisfied that Scion is attracting the target audience of young, hip, urban buyers. —Joe Szczesny

XM Expects To Double Subscribers In 2004

XM Satellite Radio expects to more than double its list of subscribers in 2004, XM officials said during a press conference at the Chicago Auto Show. Chance Patterson, XM vice president of corporate affairs, said XM had 1.36 million subscribers now but expects to finish the year with twice as many in 2004 as it continues to expand its presence on new models offered by carmakers such General Motors, Toyota, Volkswagen, Honda and Nissan. In the past week, GM announced plans to equip thirteen more models with the service and VW announced it was putting XM into a “Satellite Blue” Beetle.

In addition, XM also has boosted its aftermarket business, teaming up with Delphi Corp. to sell more than 500,000 units at $199 each for used cars. A less expensive “Roady” aftermarket model was a huge hit at Christmas, added George Lynch, XM’s director of radio. Patterson added that surveys by GM indicated the system extremely popular with consumers. The churn rate, the number of subscribers who drop the service after one year, are extremely low — just over one percent. The renewal rate among new car buyers who were offered free, trial subscriptions when they buy their new car is running at better than 70 percent, Lynch said. “This is the fastest-growing entertainment category ever,” Patterson added.

Patterson said XM is also trying to upgrade its service. Its music channels went commercial free on February 1 and on March 1 it will begin offering a traffic and weather reports in 21 top markets across the United States. The traffic system will rely on traffic counts from a system developed by Mobility Inc., which also gathers traffic data for the U.S. government.

XM also is getting ready to kick off a new promotion next month — the Dashboard Concert Series, Patterson said. Car buyers activating XM service on new vehicles purchased at Acura, Audi, Honda, Lexus, Scion, or Toyota dealerships between March 1 and May 31 will have a chance to win private concerts at XM Live Performance Theater at the company’s broadcast headquarters in Washington D.C. The winner can choose among concerts by B.B. King, Leann Rimes, Everclear, and Michelle Branch, XM officials said. —Joe Szczesny

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