The transformation of Kia has seen the Korean brand almost double its UK market share in the space of four years, and its UK boss expects the climb to continue.
Kia UK Managing Director Michael Cole is looking for almost 20 per cent growth in 2012, in a market predicted to be basically flat.
Speaking exclusively to CarandVanNews at the launch of the D-segment Kia Optima, and the day after Kia’s annual dealer conference, Cole says that the brand is looking to sell around 64,000 units this year, compared to almost 54,000 in 2011.
“In the second half of last year in a market that was down 1 per cent we grew by 20 per cent,” he adds. “With the product we’ve got and our biggest ever investment in communications and media we can keep the momentum going.”
Such growth is coming from what Cole describes as “a massive transformation of the brand” in recent years. “Up to September last year we had changed five cars in 18 months – now we have the new Optima, and the C’eed five-door coming at Geneva and on sale in June.”
This transformation has seen Kia’s retail market share grow from 1.8 per cent in 2008 (the last full year before scrappage sales distorted the market) to 3.3 per cent in 2011, the fleet share from 1.2 to 2.4 per cent.
“We’ve almost doubled our overall share, and that’s without reaping the full benefit of much of the new product as a lot of it only came in at the back end of last year, or is coming now,” Cole says.
All about perception
Cole adds that just as important is the transformation in people’s perception of Kia as a brand; “Pre all that share growth, how many people would have put Kia on their consideration list? Our product was very rational.
“Now we may not be cheap where we were cheap before, we were always reliable, always well-built, and we still have that, but we now also have design, and we are still value for money – a key point.”
Cole adds that buyers used to sum up Kia as cheap, Korean, and small; “We’re now getting “value for money”, “seven-year warranty” which are great attributes to have.”
However Kia also wants to be known for quality and design, and the cars the brand is now launching are achieving that; “We’re not just a seven-year-warranty company with great value cars.”
Cole argues that it is not a sustainable position to be a brand of cheap cars; “Someone will always come and take that from you, whether it’s the Chinese or the likes of Dacia from Renault.”
Kia’s new D-segment offering, the Optima, is expected to sell only 1,800 to 2,000 units a year, production-led figures due to its success on the Korean and US markets. However sales figures will be only part of its contribution to Kia’s growth.
“The D segment is still an important volume segment in the UK, albeit a fleet-biased one, but it’s also an important part of the market in which to have a product as a statement, to show you are represented in the UK core segments,” Cole says.
The Optima is Kia’s first serious offering in the segment – its predecessor the Magentis only sold around 200 units a year. “It had its loyal market, it was comfortable and did what you wanted to but it didn’t have a strong appeal,” Cole says.
“Optima is a striking car and in a segment that is a little bit bland it has standout looks. For us it’s a bit like Sportage – a car very much around design with a premium style to it. This adds to our growing reputation for design-led products.”
Fleet but retail too
Without production restrictions Cole believes he could comfortably sell around 4,000 Optimas a year without pushing it into short-term high-cost fleet channels. He also expects a retail demand for the car because it’s not a high-volume, mass-sales vehicle.
“We might for example appeal to Saab-type customers, people that buy a car because they like the look of it – Optima buyers will largely be new customers to the brand.”
In a segment biased 80/20 in favour of fleet, he expects the Optima split to be nearer 60/40, with most fleet business coming from user-choosers looking for something slightly different but still high value.
“I think it will get pretty good residual value figures and if we can get a sensible contract hire rate on it people who have got free choice in a user-chooser policy will go for it,” he says.
“Once you get over the badge snobbery if you have a car that looks great, drives well and is the right payment, I think we’ll do some business.”
And while 2,000 units a year won’t be crucial to Kia’s growth, it will open up potential new channels in the fleet market; “Offering a D-segment car starts to give us some chance of getting on fleet consideration lists we haven’t been on before.”
Cole says his dealers are not under-estimating how tough 2012 will be for sales, but they are confident. “My message to the dealers is that KMC (Kia Motor Co) is making the product investment, we are making the media/marketing investment, the dealer investment is to upgrade their facilities.”
He adds that dealers are adopting the brand’s new corporate identity, and understanding the size of premises they will need for their sales and service parc to realise the future potential.
But is 20 per cent growth a realistic aim in the current environment? Cole certainly thinks so.
“We’ll get 2,000 units from the Optima alone, we have the Rio three-door launching on 1st February, a full sales year for new Picanto (Kia’s biggest seller), and better supply of the Sportage that has an order bank on it – so we are confident of our growth.”
Courtesy of: carandvannews.co.uk
No comments:
Post a Comment