In the mid-1990s, Hyundai and Kia vehicles were perhaps a notch above the Yugo in the automobile world. The quality of the Korean imports was so poor and their future considered so questionable that Lithia Motors relinquished the local franchises to Ashland auto dealer Chuck Butler.

In the mid-1990s, Hyundai and Kia vehicles were perhaps a notch above the Yugo in the automobile world. The quality of the Korean imports was so poor and their future considered so questionable that Lithia Motors relinquished the local franchises to Ashland auto dealer Chuck Butler.

Today, those brands market themselves as equals in the import field and Butler looks like a genius.

"It was luck, pure and simple," admits Butler, president and chief executive officer of the Butler Automotive Group. "It wasn't any kind of wonderful foresight on my part."

Butler saw no magical rabbits popping out of the hat, but he figured there were existing customers who would need cars maintained and it would keep his service bays busy.

"Even if someone would have told me that Kia and Hyundai (rhymes with Sunday) would have been performing like this, I would not have believed them," Butler said. "We took them on when they were at the bottom. Their products were so bad, Lithia decided to give them up. But we figured there would be a lot of orphan owners who wouldn't be taken care of and decided to take on the franchises."

Butler grouped Hyundai with his Acura operation in Ashland and Kia was paired with the Ford dealership.

In 2003, the Kia dealership was relocated to the southeast corner of Crater Lake Avenue and Vilas Road in Medford and Hyundai moved to a 3-acre lot on the northeastern corner in 2005.

By then it was obvious the fortunes of the import franchises had dynamically changed. Butler was surfing a surprise wave — a revolutionary 10-year, 100,000-mile warranty inaugurated by the Korean automakers in 2002 attracted a new generation of buyers. Hyundai and Kia sales have overtaken those of Acura and Ford.

"That really put those franchises on the map and allowed us to move into Medford with both stores," Butler said. "From then on, they have been increasing market share and are on par with other major imports."

Growing pains don't always lead to a long-term payoff, but brands that succeed can command a hefty return for franchise holders."Toyota and Subaru were that way, too, once," said Dave Mills, who has ownership stakes in Dollar GMC, Airport Chevrolet Cadillac and Southern Oregon Subaru. "They all start out that way. All franchises are worth a bundle today and nobody wants to sell them."

Butler's dealerships are well-placed just up the road from Lithia Dodge Chrysler Jeep, which relocated from downtown to the western flank of Crater Lake Highway in 2007.

"There were rumors that Lithia had 100 acres just past Costco and eventually wanted to move all its franchises out there," Butler said. "We felt this was in the path of progress and felt it important to be out there."

The Hyundai store is in the midst of a $1.5 million long-term facility upgrade, adding 2,000 square feet to its service center. The four dealerships employ 75, down from a peak of 60.

"We're down 30 to 40 percent from where we were (before the recession hit), but we'll get better," Butler said. "You look regionally or at the state of Oregon, the economy in Portland is a lot stronger than Southern Oregon. Until construction begins again, we're still going to see 10 to 11 percent unemployment. It's not that the money isn't here, the problem is that nobody wants to spend it."

Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.