At Taylor it's out with the Olds and in with Kia

THE VINDICATOR
By DON SHILLING
VINDICATOR BUSINESS EDITOR
JEFF TAYLOR WAS IN NEED OF SOME good news when an unannounced visitor showed up last year at his car dealership. At the time, it seemed like he was going to be a car dealer without cars.
General Motors had announced it was killing the Oldsmobile brand, and that was all that Taylor Oldsmobile had offered for 32 years.
Taylor already had tried to find another car brand to offer at the $1 million dealership he had just built after GM encouraged him to move from Austintown to Boardman.
The problem: The top models were already found at other dealerships along Market Street, and he wasn't comfortable with some lesser-known options that were presented to him.
In walked the stranger, who was representing Kia Motors of Korea.
The good news was that Kia was looking for a dealership in the area and other dealers along Market Street weren't interested.
Taylor certainly was. He listened to the rep's proposal and then began digging into Kia products on his own.
He liked what he found out and signed on as a Kia dealer. He began offering Kia products in December.
"I think we're lucky. I really do. We could've been sitting here with nothing," he said.
The battle now is to persuade people to get into the Kia cars and take them for a spin. If people drive them, Taylor thinks they will see that the Korean company is building high-quality cars.
Although his sales staff often had to defend Oldsmobile's pricing, saying you had to pay for quality, the opposite is true with Kia, he said.
In order to make inroads in the U.S. market, Kia has priced its cars lower than many of its competitors. The dealership's new message is that you don't have to pay a lot for quality.
The Rio, Kia's small wagon, starts at $9,000. It has two sedans -- the Spectra sells for between $13,000 and $15,000, and the Optima for between $17,000 and $21,000. The Sedona minivan sells for between $18,000 and $22,000.
The most popular model, the Sportage -- a small sport-utility vehicle -- sells for between $18,000 and $20,000 for the four-wheel drive version. A larger SUV is coming out in September.
To back up its products, Kia offers a 10-year warranty.
Must sell more: Taylor said he will need to sell more Kias than Oldsmobiles to make the same amount of profit.
He was selling 450 new cars a year in Austintown and is looking to sell between 500 and 600 a year after two or three years with Kia.
The nearest Kia dealerships are in Alliance and Beaver Falls, Pa. Taylor said he doesn't expect Kia to open other dealerships in this area if his dealership performs well.
Taylor said Oldsmobile will continue making cars until June 2004, though he isn't sure how long he will be selling them. For now, his dealership is called Taylor Oldsmobile Kia of Boardman.
GM and Taylor reached a settlement over the canceling of the Oldsmobile brand, though Taylor said a confidentiality agreement prevents him from talking about it. "It was fair," he said.
Help from GM: GM didn't help pay for his new building but did assist in a marketing study and design work.
Taylor said the declining sales that Oldsmobile suffered in recent years wasn't because of the cars themselves, but how they were marketed.
He said GM made Oldsmobile its import-fighting division, while GM customers always had viewed it as the place to go for cars with bench seats and a soft, cushy ride. GM began positioning Buick as the place to find those cars.
Still, Taylor said he isn't bothered by what happened to the brand that his family built their dealership around.
Good spot: He said he's satisfied to be representing a brand that is determined to increase its presence in the market and is investing heavily in marketing. He also has a new building in an auto dealers row where carmakers want to be.
"We've got Kia," he said. "We're well-positioned to get whatever might come along, whatever that might be. We're pretty happy."
shilling@vindy.com