Kia Sales Got Soul While Tesla's U.S. Sales Are Superbad

NEW YORK (TheStreet) -- There are some inflection points where industries have to adjust to inevitable trends in the human condition.  For example, Chipotle Mexican Grill (CMG) has capitalized on the trend of consuming healthier foods.

Another major trend is people are becoming taller and older.  In response to this, clothes are sold in larger size, and health care spending is going up.  One more company capitalizing on people becoming taller and older is Kia (KIMTF), which has designed a compact car to better fit those of us who are taller and older.

Kia launched its first Soul model a few years ago, and for the first seven months of 2014 U.S. sales are 90,000, up 23% from a year ago.  For comparison, Tesla's (TSLA) U.S. sales are down by 26% for the first half of 2014, and that's for approximately 80% fewer cars sold.

Perhaps Kia should take its Soul business public and demand a $150 billion market cap for this product line -- seeing as it's selling five times as many cars as Tesla with its inverted growth profile -- and actually making money instead of burning it?

But I digress.  Back to the Soul, as a car.

A key reason the Kia Soul has seen one of the strongest sales increases of any kind of car in the U.S. market in 2014 is because it revised the Soul model a few months ago.  The car was updated with better looks on the outside and a more refined and feature-rich interior.

You may say: America has already had numerous kinds of cars for tall and older people.  We had a minivan wave in the 1980s and 1990s followed by an SUV wave in the last 15 years.

That's right, but those have tended to be larger and heavier cars.  Minivans are long and SUVs are heavy. That has also tended to make them more expensive, all other things equal.

Yes, you can pick up a no-frills Mazda 5 or Dodge Caravan for around $20,000, but they will have very little equipment for that kind of price.  Also, some people prefer a car with an even smaller footprint -- aka shorter -- that's easier to park.

The Kia Soul is essentially a front-wheel drive compact car that has been put on stilts, making it easy to get in and out.  Headroom space has also expanded, and rear seat room is terrific.  Luggage space is modest, but very well-shaped and you can expand it easily.

The Soul is as wide as any normal midsize car, but it's short.  The overhangs are tiny.  This makes it exceptionally easy to park but it also makes for a choppy ride.

Once you have entered the car -- which is very easy if you're old or tall because there is lots of room and you're not bending down into a bucket -- you will find one of the market's more comfortable seats.

Even the headrest feels a class or two more expensive than the Kia Soul's loaded price of $26,195. Just as important as the seat itself, however, is the seating position, which I found to be as good as in any car ever, with only some exceptions such as the new Volvos or BMW i3.  The steering wheel telescopes nicely for someone with long legs.

The steering wheel itself is barely okay.  I recently drove a Volkswagen (VLKAY) Jetta, whose steering wheel felt grippier.  A few years ago, this steering wheel would have been top-rated but the industry standards have been elevated rapidly.

The Kia's overall ergonomics of the buttons and the infotainment system are excellent, but there are exceptions:

Tire pressure monitoring:  There isn't one -- not real-time, and not for each individual wheel.  This ought to be standard on any car, period.

The other complaints about the interior have to do with parts of the infotainment system.  While the graphics are good and the system basically works just fine, it has a couple of annoying characteristics.

First, if you have your smartphone set to output to a Bluetooth device other than the car's speaker system, the car finds a way to interrupt the signal after a few seconds.  Really annoying.

Second, every time you fire up the car, it asks you to confirm or otherwise agree to... well, I never read what it's asking so you have your answer right there. This is one annoying distraction.

Third, the system keeps asking to download my smartphone's contacts.  Every time it asks, I say "no." Why do I have to answer this question every time I turn on the car?  My answer is always the same.  Can't you take a hint after I already answered it?

One word about the sound system: It's absolutely fantastic!  I don't listen to very much music but podcasts, where one would think quality wouldn't matter much.  However, even listening to these simple podcasts I could hear a degree of clarity I can't recall from any other car in recent memory.

The rear seat comfort is outstanding, with ample room for all of a tall person's body parts -- even for a middle passenger. This could be a taxi!

I can't emphasize enough what a pleasure it is to deal with a car with such ideal dimensions as this Kia Soul. The size and shape is "just right" in that you get superb space for five people -- but no extra bulk that would make it difficult to park.

With all of these positives, what are the downsides of the Kia Soul?

First but not most importantly, the nature of the tall body means the ride is choppy.  There is no free lunch here.  The taller the body, you either have to stiffen the suspension or worsen the handling. This is not the car you want to drive fast in turns.  Best to drive slowly and calmly when the road isn't straight.

The only serious big-ticket argument against the Kia Soul is the engine and its resulting fuel economy.  The four-cylinder two liter gasoline engine is fairly standard for its class, but let's say you get onto the highway and set it to 65-mph cruise control.  Once you start to hit a bit of an uphill, the engine doesn't have enough torque to avoid a less-than-optimal down-shift.  It's not a rich experience.

The car is rated at 23 miles per gallon city, 31 mpg highway.  I managed to match the 23 mpg city rating, but fell short on the highway at 28 mpg.  Either way, these are not great numbers in the market today, even though they would have been considered good just three or four years ago.

The Kia Soul clearly needs Volkswagen's four-cylinder diesel that is found in cars such as Golf and Jetta.  It has fantastic torque and a beautifully matched automatic transmission.  The fuel economy would also be 30%-40% better.

So there you have it: The new Kia Soul has all the bones of grabbing market share, as it leads the creation of a new class of car.  All it needs are a few tweaks to the infotainment system and a new engine.

Speaking of new engine, there is another one coming soon: an electric version.  Kia stated publicly that we should expect the electric Soul to arrive this Fall.

Adding a diesel that could compete with Volkswagen's four-cylinder cars wouldn't hurt either.

In the meantime, the fully loaded Kia Soul stickers for $26,195 and I would not buy the car with any lesser equipment.  It is a reasonable price for what you get for the money, and our country's increasingly taller and older people are voting with their feet in favor.  

If the Tesla is a success with U.S. sales falling an estimated 26% in the U.S. in the first half of 2014, why isn't the Kia Soul a ringing success with U.S. sales up 23% in the first seven months of 2014?

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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