WEBVTT - Kia's Sprague on Crossovers Driving Record Sales in May (Audio)

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<v Speaker 1>Broadcasting live to New York, Bloomberg eleventh Rio to Washington,

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<v Speaker 1>d C. Bloomberg to Boston, Bloomberg twelve hundreds to San Francisco,

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<v Speaker 1>Bloomberg to the Country Series Exam Channel one nine, and

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<v Speaker 1>around the globe the Bloomberg Radio Plus and Bloomberg dot Com.

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<v Speaker 1>This is taking Stock. I'm Kathleen Hayes. Welcome back. My

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<v Speaker 1>co host Pim Fox is out of the office today.

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<v Speaker 1>A big day for auto sales, the likes of GM

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<v Speaker 1>and Ford having a decline in their recent auto sales,

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<v Speaker 1>while Kia looking pretty good. In fact, Kia announced record

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<v Speaker 1>May sales. We're going to find out how much Hamsters

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<v Speaker 1>will be helping those sales. First, let's get to Charlie

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<v Speaker 1>Pellow in the newsroom. He's got a bloom big business

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<v Speaker 1>flash and stock. So Hi, Thank you, Kathleen. Twenty nine

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<v Speaker 1>minutes to go ahead of the clothes on this page

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<v Speaker 1>book Wednesday. We are brought to you by Sectors to

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<v Speaker 1>E t F S. Why buy a single stock when

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<v Speaker 1>you can invest in the entire sector of visits sector

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<v Speaker 1>s P d R S dot com or call one

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<v Speaker 1>sector E t F Federal Reserve says the U. S.

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<v Speaker 1>Economy expanded at a modest pace across most of the

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<v Speaker 1>countries since mid April, causing the labor market to tighten

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<v Speaker 1>as employers continued adding jobs and nudging wages higher. In

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<v Speaker 1>its page book report, the Fed said quote wages grew

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<v Speaker 1>modestly and price pressures grew slightly in most districts. Stocks

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<v Speaker 1>a little changed after the SMP five d index captain's

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<v Speaker 1>longest stretch of stretch of monthly advances since two thousand fourteen,

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<v Speaker 1>first trading day of the new month. Stocks are higher

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<v Speaker 1>right now SMP of two points to two thousand ninety nine,

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<v Speaker 1>a gain of point one percent, down, industrials up nine

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<v Speaker 1>again also a point one percent, and stack up six

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<v Speaker 1>a gain of point one percent. One issue for investors

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<v Speaker 1>is the deal making in ament and government regulation. Bob

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<v Speaker 1>dall As, senior portfolio manager at Neuvine Asset Management, Sadly,

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<v Speaker 1>we just don't know what the rules are. You know,

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<v Speaker 1>you you're do an M and a transaction and then

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<v Speaker 1>the government turns around and and breaks it up later,

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<v Speaker 1>or you don't know what the regulatory environment is going

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<v Speaker 1>to be or the tax environment. Like investors with uncertainty,

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<v Speaker 1>corporate managements are facing the same thing, so they're very

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<v Speaker 1>reluctant to step forward, and investments stead stayed well below

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<v Speaker 1>what we'd like to see. Gold down three ten younds

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<v Speaker 1>to twelve fourteen, a drop of three tenths of one percent,

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<v Speaker 1>Crude now hired by seven cents, seventeen, naval gain of

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<v Speaker 1>point one percent, and three two on Wall Street. Now

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<v Speaker 1>we'll look at other news. Thank you, Charlie from the

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<v Speaker 1>Bloomberg News room. I'm Rainey, innocent. CIO. Police on the

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<v Speaker 1>campus of U c l A say today's shooting was

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<v Speaker 1>a murder suicide. The campus had been on lockdown since

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<v Speaker 1>this morning when reports of a shooting came in. The

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<v Speaker 1>lockdown has now been lifted and official say the campus

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<v Speaker 1>is safe. A French company says it's special undersea search

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<v Speaker 1>vessel has detected signals from one of the flight recorders

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<v Speaker 1>on egypt Air eight oh four that crashed into the

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<v Speaker 1>Mediterranean Sea last month. A company statement does not say

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<v Speaker 1>how it knows that the signals were from the egypt

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<v Speaker 1>Air black box. The French investigation agency b e A

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<v Speaker 1>says it's impossible to determine from the signals whether it

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<v Speaker 1>is the flight's data or voice recorder. Donald Trump tops

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<v Speaker 1>Hillary Clinton on honesty. According to a new national poll

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<v Speaker 1>by Rasmussen Reports, thirty percent of voters found Trump more

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<v Speaker 1>honest than most politicians. That's compared to fifteen percent for Clinton.

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<v Speaker 1>But voters found both presidential candidates less honest than most

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<v Speaker 1>other politicians say Clinton and fort say Trump is less honest.

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<v Speaker 1>May was a violent month in Chicago. Police say there

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<v Speaker 1>were sixty six murders and more than three hundred shootings

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<v Speaker 1>in the city last month. Interim Police Superintendent Eddie Johnson

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<v Speaker 1>says a city needs to do a better job of

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<v Speaker 1>stopping repeat offenders. Some of the parts that we are

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<v Speaker 1>getting correct is simply holding these individuals accountable for repeat

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<v Speaker 1>gun offenses. So I'll be spearheading the charge to hold

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<v Speaker 1>them more accountable. So we need our judicial partners in

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<v Speaker 1>our state legislators to help the help us hold them accountable.

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<v Speaker 1>Johnson says more than sixty people were struck by gunfire

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<v Speaker 1>over the Memorial Day weekend. Global News twenty four hours

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<v Speaker 1>a day, powered by our journalists in more than one

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<v Speaker 1>fifty news bureaus around the world. From the Bloomberg Newsroom,

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<v Speaker 1>I'm Rainey Incencio, Charlie and we thank you, and again

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<v Speaker 1>recapping stocks to remain higher. S and P five index

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<v Speaker 1>up three now to two thousand, ninety nine point sixty seven,

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<v Speaker 1>a gain of point one percent. I'm Charlie Pellett and

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<v Speaker 1>that's a bloom Bird business flash. You're listening to Taking

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<v Speaker 1>Stock with Fox on Bloomberg Radio. If you're US big

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<v Speaker 1>three auto manufacturing me, it was not so hot for you.

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<v Speaker 1>Declines for Ford and GM. In fact, GM sales down

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<v Speaker 1>four down six percent. Christs are up just one percent. However,

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<v Speaker 1>if you are the head of Kia Motors America, you

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<v Speaker 1>are clapping today. I am sure announcing the best every

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<v Speaker 1>male sales on record, nearly sixty three thousand units. It

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<v Speaker 1>was highlighted by double digit increases for the Sportage and

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<v Speaker 1>Sorrento c u VS. Very happy to welcome to the show.

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<v Speaker 1>Now someone who can tell us what's going on, what's

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<v Speaker 1>driving this game, and that'd be Michael Sprague's CEO, chief

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<v Speaker 1>operating officer for Kia Motors America, and he's joining us

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<v Speaker 1>from Irvine, California, this afternoon. Welcome Michael, Thanks for having

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<v Speaker 1>me so a good month. You've had a few good months.

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<v Speaker 1>What what to what do you attribute the strength of

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<v Speaker 1>Kia sales now? I would say we've got the right

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<v Speaker 1>um products for the market right now. Uh, that you

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<v Speaker 1>mentioned our CUV sales were up in May. Consider are

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<v Speaker 1>all new Sportage which just came out the spring head

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<v Speaker 1>its best month ever, uh, selling over units and our

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<v Speaker 1>Sorrentos see you be sold close to twelve thousand units.

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<v Speaker 1>And as we've been talking about over the last year,

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<v Speaker 1>consumers are shifting to cuvs, and we've got two of

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<v Speaker 1>the newest products in the market. Just to make sure

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<v Speaker 1>everbody realizes too that a CUV is a crossover utility vehicle.

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<v Speaker 1>So how much do you expect the Kia Hamsters to

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<v Speaker 1>add to that? I think this is so fun. As

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<v Speaker 1>of Friday they are back after a two year hiatus,

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<v Speaker 1>dancing and singing away yet again. Yes, absolutely, we've introduced

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<v Speaker 1>them back in two thousand and nine when we introduced

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<v Speaker 1>the Soul and which is also a crossover utility vehicle,

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<v Speaker 1>and every year our Soul sales have gone up and

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<v Speaker 1>uh we had this is now the seventh campaign and

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<v Speaker 1>we found a direct link between when we advertised that

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<v Speaker 1>with the Hamsters are sold, they go up and so

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<v Speaker 1>our dealers were asking for it, consumers were asking for it,

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<v Speaker 1>so we thought now was the right time to bring

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<v Speaker 1>them back. Well, I've bet a lot of TV networks

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<v Speaker 1>were asking for it too. I mean, that's a it's

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<v Speaker 1>an ad that would bring in some revenue. But instead

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<v Speaker 1>you're going to be showing only on YouTube and some

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<v Speaker 1>thirty four thousand movie theaters across the country. Why not television? Well,

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<v Speaker 1>you know, we we see television ratings to client viewership

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<v Speaker 1>decline over the summer because a lot of reruns come

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<v Speaker 1>back and people are out doing other activities and a

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<v Speaker 1>lot of people are actually going to the movies, and

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<v Speaker 1>particularly between Memorial Day through Labor Day, it's one of

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<v Speaker 1>the biggest times for the movie industry, and you know,

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<v Speaker 1>people are there to be entertained, and we've got an

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<v Speaker 1>ad that we think will definitely connect with consumers as

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<v Speaker 1>the preparing to watch the latest movies. Do you think

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<v Speaker 1>is this part of a move away? Do you think

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<v Speaker 1>Americans viewing habits have changed so much that's just not

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<v Speaker 1>worth it to pay the big bucks to advertise on

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<v Speaker 1>a big network. No, I would say that, you know,

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<v Speaker 1>it's all everything works um in compliments to each other.

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<v Speaker 1>I mean, we still have, as a brand that's only

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<v Speaker 1>been in the US for the last twenty years, we

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<v Speaker 1>still have to use broadcast television to raise awareness for

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<v Speaker 1>the brand um and also you know, YouTube and other

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<v Speaker 1>digital means in now cinema as well. All of them

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<v Speaker 1>helped compliment and spread the message because consumers are watching

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<v Speaker 1>and consuming content in so many different places. Michael Sprague

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<v Speaker 1>is the CEO of Kia Motors America. When you see

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<v Speaker 1>the sales figures for some for some of the big

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<v Speaker 1>auto makers, big auto sellers in the US, this in

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<v Speaker 1>the month of May, does that concern you at all?

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<v Speaker 1>Do you think there's the question being raised today for

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<v Speaker 1>a lot of US is have auto sales peaked well?

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<v Speaker 1>You know, And again it goes back to product and

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<v Speaker 1>if if you have the right product, then your sales

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<v Speaker 1>should continue to be pretty strong. And they mentioned we

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<v Speaker 1>believe we've got the right product. Over sixty three percent

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<v Speaker 1>of our sales are for cuvs or people movers. So

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<v Speaker 1>the sportage current of the soul in the Sedona, uh,

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<v Speaker 1>And so I think we're feeling pretty good about the

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<v Speaker 1>outlook for the rest of the year. Gas prices are

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<v Speaker 1>going up a little bit, not too much of a concern.

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<v Speaker 1>At this point, the FED is probably going to raise

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<v Speaker 1>the rates. I think we'll be able to manage through that.

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<v Speaker 1>You know, the election. I think there's still there's some

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<v Speaker 1>people that are holding back a little bit until they

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<v Speaker 1>see what happens with the election. But for a brand

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<v Speaker 1>like US, that's basically all new since we came over

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<v Speaker 1>the last couple of years. You know, people are discovering

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<v Speaker 1>us and they're excited by what we're offering. You've just

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<v Speaker 1>opened a manufacturing plant in Mexico. Will uh, you'll be

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<v Speaker 1>shipping a lot more than autos into the US from Mexico.

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<v Speaker 1>And will it save you money to have autos built

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<v Speaker 1>in North America. Yes, So this is now our second

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<v Speaker 1>production facility in North America. The first one we have

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<v Speaker 1>is in West Point, Georgia, where we build the Optima

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<v Speaker 1>and Sorrento, which makes up about forty of our US sales.

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<v Speaker 1>And so now having this other facility in northern Mexico

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<v Speaker 1>does allow us to ship vehicles there to the US,

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<v Speaker 1>but it also allows us to ship vehicle to other

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<v Speaker 1>parts of Central and South America. So it's from a

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<v Speaker 1>strategic standpoint, it's very beneficial to the US. Well, Michael Sprague,

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<v Speaker 1>thank you so much for joining us. Congratulations on your

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<v Speaker 1>your sales for May, and and thanks for bringing the

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<v Speaker 1>hamsters back for Kia being having the opportunity. Okay, Michael

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<v Speaker 1>Sprague is chief operating Officer executive vice president for Kia

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<v Speaker 1>Motors America, joining us today from Irvine, California. We're gonna

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<v Speaker 1>be taking a look at stocks next. The averages are

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<v Speaker 1>slightly higher today. We've got the Dow Jones up about

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<v Speaker 1>attempt sixteen points to seventeen thousand, eight three, with SMB

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<v Speaker 1>five hundred up three point four, about point two to

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<v Speaker 1>the Nastacks at point one five. That's seven points at

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<v Speaker 1>This is Bloomberg Radio. Stocks are modestly higher today two

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<v Speaker 1>weeks to the FED while they raise raids or not,

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<v Speaker 1>and are opportunities better overseas for investors. That's coming up

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<v Speaker 1>now on Bloomgrigg Radio.