Business & Real Estate

Sacramento auto dealer to open Kia dealership on Fulton Avenue

Sacramento auto dealer Todd Lutes will open a new Kia dealership this month along Fulton Avenue’s auto row.

Lutes said he and his staff have been in the process of organizing the store at 2820 Fulton Ave. and that he expects to start selling new and used Kia vehicles there by the third week of July.

For now, Lutes Kia will operate in the same building as Lutes Mitsubishi, which Lutes opened in March last year.

The Kia addition continues what has amounted to an extended comeback for the auto row on Fulton, which saw some stores close down during the recession as vehicle sales plunged statewide. Among those closing was Great Valley Chrysler Jeep Mazda Isuzu at 2329 Fulton Ave. in May 2008.

Even before that, the proliferation of Sacramento-area auto malls more than 20 years ago prompted some Fulton Avenue veterans to pull up stakes and head to major auto malls in Roseville, Folsom and Elk Grove.

In recent years, however, Fulton Avenue has experienced a revival.

Sacramento-based Niello Co. has dealerships selling Jaguar, BMW, Fiat and Land Rover models on Fulton. In late 2014, Kuni Chevrolet Cadillac christened an opulent new showroom and service facility at Fulton and El Camino avenues.

The 2820 Fulton Ave. site also has seen a comeback.

Before Mitsubishi moved in last year, it was the site of Sacramento Kia, abandoned in December 2014. Before that, the site was the longtime home of Mel Rapton Honda, which moved into a new facility along the Capital City Freeway in early 2009.

Lutes also runs, an internet-based, used-car-selling operation that started in Gold River but moved to 1733 Fulton Ave. in 2012. Operations moved last year to the 2820 Fulton Ave. site.

Lutes Mitsubishi opened last year, with about 45,000 square feet of leased facilities for sales, offices, a showroom, parts and service. Eventually, Lutes said, Mitsubishi operations will move into an adjacent building on the same site.

The South Korea-based Kia-Hyundai ownership collaboration has made significant gains in the United States over the past decade. Once known for producing relatively cheap, bare-bones models, Kia and Hyundai have gained in numerous U.S. automotive surveys.

Last month, California-based global market researcher J.D. Power ranked Kia at the top of its 2016 U.S. Initial Quality Study. It was the first time in 27 years that a nonpremium brand topped the rankings. Power said it was also the second consecutive year that Kia, which ranked second overall in 2015, led all nonpremium makes in initial quality.

“Kia just won the J.D. Power award for top quality in the industry, so everybody is super pumped about that,” Lutes said. “We now have two great brands and are really excited about the future.”

In 2015, Hyundai-Kia makes ranked sixth in California in new car sales market share, at 7.6 percent, according to the California New Car Dealers Association in Sacramento. That statewide share ranked relatively close to Nissan (8.8 percent) and the U.S. auto-manufacturing giant General Motors (9.8 percent).

The CNCDA also said that Kia models saw the fourth-highest percentage gain in new-vehicle registrations in California, 15.4 percent, between 2014 and 2015.

Mark Glover: 916-321-1184, @markhglover