East Londonderry MP Gregory Campbell said the chosen name had "deeply offensive connotations".
Members of the Provisional IRA, who engaged in bombing campaigns during the Troubles in Northern Ireland, are often referred to as 'Provos'.
The Korean car-maker unveiled the car just in time for the International Geneva Motor Show, billing it as a "radical super-mini coupe which aims to set the streets alight".
But the Provo name, apparently chosen at Kia's European headquarters in Germany, has raised eyebrows in Northern Ireland and the rest of the UK.
There can be little doubt about the offensiveness of the name, not least to those who suffered directly at the hands of Provisional IRA sectarian murderers.
Gregory Campbell, DUP
According to a Kia spokesman: "There was absolutely no intention to cause offence. The name comes from 'provoke' - as in provoking a reaction."
And according to Mr Campbell, Kia has since apologised and confirmed that the car would not be launched in the UK under the 'Provo' name.
"The swift action by Kia is to be welcomed," the DUP politician said.
"Obviously, a large multi-national company may not be aware of all the connotations surrounding a particular name. However, in such circumstances, it is important that they act quickly when they are made aware that the name is actually linked to a terrorist campaign."
Mr Campbell added: "I accept that this was a mistake made by the company and I know that their decisive action will be welcomed by many people, in Northern Ireland and beyond, whose lives have been affected by the murderous actions of the Provisional IRA over a 30-year period."
No specific production schedule has been put in place, so it could be some time before the Provo hits the roads elsewhere.