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KIA Ups the Ante

Kia has replaced the Spectra, which sold very well. Yet Kia says the car did not connect with its owners.

Get this straight, management accounting is not just about numbers. How we feel (read How We Decide or my remarks on socionomics) determines what we do. 

Picture 4 We are studying managerial accounting.  Benchmarking best practices is a topic of Chapter Two. Note that the new Kia Forte was fashioned not in Seoul but in Kia's California design studios. Note also the number of articles that appear on this blog about the importance of design. 

Kia has been using words beginning with S ot name its cars,  a soft sound now that I think about it, Spectra, Sephia (huh?), Sorento, Sonata (I am going to sleep, sounds like a baby lullaby)

As MT says this is THE toughest segment matching off against Honda CIvic, Toyota Corolla, and Mazda 3. 
This time Kia chose the name Forte, let's check

1 : the part of a sword or foil blade that is between the middle and the hilt and that is the strongest part of the blade2 : one's strong poin

Hmm I think they are serious. With US auto sales still below 10 M a year, a huge 30% drop the competition is more fierce than ever. So you say big deal a 30% drop so what?  The so what part is that for most manufacturers, we have dropped to break even or below in terms of units sold. This is why it is imperative to grasp the cost terms of fixed and variable cost as well as those cost of goods sold statements in chapter two gross profit or gross margin is REALLY important) as well as the break even graphs in chapters 5 and 6. 

The Administration has created a new jobs program with Chrysler and GM.  Chrysler does not even offer an economy car, take about zero to bad strategic planning. GM has finally produced a cobalt that is getting good reviews, good thing they competition is heating up. My point being that our Government has the weakest players in the game to field an economy car. Good thing it owns the money printing press….

Yes I will make a lot of references to the car industry, I understand cars and they are more fun than computer chips. And they are front and center in the news. Car Wars are always fierce but now more than ever. A company can only go so long at break even. Everyone is assuming the economy will improve soon and car sales will go back up. But the stats I read have Americans saving for the first time in decades, not spending. Companies will be competing as thought their existence depended on it, it does. 
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8 responses to “KIA Ups the Ante”

  1. Felix Duque Avatar
    Felix Duque

    Has anyone seen the new commercial? They say something like they are celebrating that they had very good vehicles by lowering prices. Sure, like we don’t know that it is because no body is buying right now 🙂
    As of the comment of cars being more fun that computer chips, I happen to disagree 🙂 I love technology and I would appreciate if you include some of the articles about the new Operating System, or maybe what people think about Windows Vista and what their experiences are.
    Thanks…

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  2. Dennis Elam Avatar
    Dennis Elam

    Obviously you have not driven an M series BMW or perhaps a 3.2 L Porsche Boxster at full tilt on a curved road course….
    Okay, my comments here about how MSFT manages to still dominate an industry with a product that crashes any time one has three or four windows open. At a recent conference the speaker announced that MSFT ‘discovered’ most people did not know all the features their programs offered. The solution was Office 2007, ditching the paradigm we all knew, pull down menus, begining a new ribbon format and thereby obsoleting all the excel books I owned, and of course, charging the users for their mistake by selling Office 2007! Does this sound like the old GM? the answer is yes…..
    Ballmer thinks people will not switch to macs as they cost more, Steve hello they deliver more I am writing on my mac at home and it has not crashed in the last two hours!
    Windows is what the British and American car industry were in 1975…..

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  3. Felix Duque Avatar
    Felix Duque

    Well, I’ve driven the BMW 325i, and I liked it.
    As far as the change of Office 2007 menus to Ribbons, I don’t see how it would obsolete your excel books, but I have found interesting how people that had never used Office, find it very easy to use, because they are just learning it. For people that have been using it for a long time, it makes it harder, because we are looking for menus that we are used to. I believe that there is no such thing as applications without bugs, and as far as the Mac vs. Windows, I have nothing to say, there is a ton of discussions about this, and personally I think that there is not enough Mac users compared to Windows users, to be able to determine which one works best. For example: 1 user uses 1 program, the probability of finding errors is very low, on the other hand 10 users use 1 program, of course there is going to be more bugs found.
    Then again that is only my opinion…

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  4. Dennis Elam Avatar
    Dennis Elam

    Felix
    a stopwatch can determine which program starts or shuts down faster and it is mac hands down, no contest

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  5. LeAnna M Nesbitt Avatar
    LeAnna M Nesbitt

    Mgt Accounting involves consumer sentiment or attitude about style and quality of products available at specific store locations. The new Kia “Forte” model is an example of a automobile manufacturer recognizing that different populations have loyalty towards brand names or product labels that appeal to the local culture. In a word, Kia executives hit the Southern California dealers showrooms with a new name in their product line up with the Forte. A definition of the word (Forte) means the strongest portion of a sword. The United States auto industry is known as “loser groups”-losing market share quarter after quarter for several years compared to the American import dealers. GM, Ford, and Chrysler losses have benefited the likes of Toyota, Honda, Kia, and Volkswagon. To be a profitable auto dealer in the U.S. the volume has to show a pattern of continued growth to cover all changing internal and external operating costs. The U.S Big has not ever been able to present a viable modification plan to change their market view that Americans will always buy big trucks and big vans regardless of economic conditions and rising fuel prices and legacy lines. The unfortunate obstacle for the U.S auto makers is to keep producing legacy line vehicles that represent the “Big As Texas” marketing programs. With the new Forte model, Kia will create more share-loss problems for GM, Ford, and Chrysler.

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  6. Dennis Elam Avatar
    Dennis Elam

    LeAnna
    Clearly you have an auto background, yes Obama has picked the weak sisters of the group to launch a green objective, he would be better off with Penske and Saturn…

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  7. william raymond Avatar
    william raymond

    Kia is the new type of honda like toys out on the market.
    Hyundai is is Korea most recognize brand for cars is on top of them by a margin. I like the new Forte idea and look. Hope though its as comparable to my honda civic. TO be frank I have a toyota celica and honda civic now. I had a hyundai that cost about 3000. and it lasted such a good time. I think even better than my Japan cars. Kia keep it up.

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  8. Leisa Dreps Avatar
    Leisa Dreps

    Forte, huh. They chose a good name for that car. If its name lives up to its overall performance and quality, then this car can definitely be one of their best sellers.

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