Kia Vastly Underestimated Demand For The Telluride SUV

Kia Vastly Underestimated Demand For The Telluride SUV

Kia’s initial production plans for its new Kia Telluride three-row SUV were 60,000 units built per year. With actual production capacity now peaking at 100,000 units and still not enough cars to meet demand, Telluride buyers are going to have to wait.

My colleague Tom McParland, who is also an automotive purchasing consultant, has been reporting on the surprising void of deals on the new Kia Telluride and its sibling the Hyundai Pallisade for months. Both strangely remained immune to the steep deals other automakers are offering in the wake of the COVID-19 pandemic and its economic impact.

And now we may know why the Telluride pricing has remained relatively inflated: Kia can’t build them fast enough to meet demand, The Car Connection reports:

At the end of June Cars Direct reported there were barely 700 Tellurides listed for sale nationwide while there were over 20,000 Ford Explorers and 12,000 Honda Pilots on dealers’ lots.

James Bell, director of communications for Kia, said he has heard this story on a weekly basis. “This is the most (Kia) could turn out, and it can’t be built somewhere else,” Bell said.

When the Telluride debuted in February 2019, Kia set an annual production capacity of 60,000 Tellurides at its only U.S. production facility in West Point, Georgia, where certain trims of the Sorento and Optima are made as well..

“We blew past that and ramped it to 100,000 units,” Bell told The Car Connection. Meeting demand “is going to be tight even at 100,000, but it’s the best we can do.”

On top of that, the West Point, Georgia facility was shut down for eight weeks due to the pandemic. When it opened, it was down to just one shift, with a slow ramp up to now three shifts. The automaker also cited parts shortage from a Mexico supplier — many of which are still suffering their own recovery from the virus — as a contributor to SUV shortages.

The Car Connection story details one couple’s struggle to take delivery of the Telluride they already ordered nine months ago. When they decided to order it back in October, they were given a five-to-six month wait time, which is almost absurd on its own for a rather pedestrian SUV. They’ve now been told it will be another five months, so over a year, since they ordered their Telluride.

Before the outbreak of COVID-19 earlier this Spring, Kia claims the dealer lot turnover rate for the Telluride — so how long one is parked on the lot before it sells — was just 11 days, which is way lower than the average of 60 days for vehicles considered strong sellers.

If you can find a Kia Telluride or Hyundai Palisade on a dealer lot, consider yourself lucky. If you can find one without a markup, or better yet with any sort of discount, then you better act fast. Is there a market for flipping $70,000 family SUVs?

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