Toyota and Kia bet on sports cars to turbocharge brands

Members of the media crowd around the Kia GT4 Stinger concept car as it is displayed during the press preview day of the North American International Auto Show in Detroit, Michigan, US, January 13, 2014. [Photo/Agencies]

Asian rivals Toyota Motor Corp and Kia Motors unveiled concept sports cars this week that appear to target different demographics but share a common goal to add some sizzle to their brands.

Toyota said the FT-1, a muscular-looking coupe unveiled Monday at the Detroit auto show, would deliver the type of heart-pumping performance CEO Akio Toyoda has complained is lacking in its fleet of reliable but predictably designed cars.

Toyota FT-1 concept car

N. American Auto Show kicks off

Toyota said it was not sure whether it would take the car into production and did not disclose specifications. But analysts believe it is plotting a return to the segment after discontinuing the Supra more than a decade ago, and that it will likely produce a high-performance model catering to a well-heeled clientele.

Kia, meanwhile, appears to have a younger client in mind with its 315-horsepower GT4 Stinger, which also had its debut at the auto show. It cited the Mazda MX5 and Scion FR-S - a Toyota offshoot brand focused on young customers - as possible competitors down the road.

"I don't see this concept competing with Porsche or Ferrari or Lamborghini or something. There are other mass market brands which offer sporty cars," Tom Kearns, Kia's chief US designer, told Reuters.

Toyota, the world's largest automaker, and Kia, a much smaller South Korean affiliate of Hyundai Motors, are in vastly different stages of their development. But both see a sports car as a way to invigorate their brands.

Both companies seemed resigned to forgo the pursuit of big profit margins in return for the elusive "halo effect" a high-performance or trend-setting car can generate.

Jim Lentz, head of Toyota's North American operations, said Toyota has had good results with that strategy in the past, such as with the retro style FJ Cruiser SUV. But with sports cars demand can disappear quickly after an initial spurt, he warned.

"Not to say that people don't do sports cars because of the halo effect it has for brands. But in terms of the business of selling cars and making money on cars, sports cars don't make a lot of sense," Lentz said.

Hank Lee, vice-chairman of Kia Motors, told reporters the sports car concept is part of its efforts to launch another attention-grabbing vehicle after its success with the Soul box car. He said it would decide whether to produce the GT4 Stinger after evaluating consumer response.

The GT4 Stinger, which features Kia's signature front grille, vertical LED headlights and a swooping roofline, is the next logical step in the company's development in the US market, Kearns said.

While over the years Kia has transformed its image from a maker of low-priced cars, it needs more excitement to drive traffic to their showrooms, even if it means sacrificing some profits on producing a sports car, Kearns said.`

"Even if you don't make a huge amount of money, it doesn't mean that it is a failure because the way it changes your image, and attracts a different type of customers that we don't have now," he said.