The Editor’s Q&A: Paul Willis, Kia Motors Europe COO
Kia in Europe has recently changed personnel at the top. Kwang-Ho Nam is now president of Kia Motors Europe while Paul Willis has taken up the newly created role of chief operating officer (COO). Dave Leggett recently spoke with Paul Willis about Kia's plans to grow sales in Europe.
DL: How do you see Kia's sales volume evolving in 2008?
PW: In 2008 in Western Europe we want to sell around 300,000 cars - up from about 266,000 last year. In order to do that we have some additional models that we didn't have last year. There's the Cee'd sporty wagon, which has been particularly well received in Germany and other countries in mainland Europe. And we have just launched the new 3-door in the last few weeks.
We want to progress, we want to develop our volume and develop our market share and establish Kia as a brand across Europe.
DL: And medium-term what volume are you looking for?
PW: All that is to play for. The vision will be to grow the volume in Europe to 500,000 units a year by 2010. This is visionary. We have to get the new models into the market and see how they perform. It could be that actual performance is slightly less or better. I think you have to be flexible in that situation.
The key point is that we are a growing brand, we're a brand that wants to establish itself in Europe and that is tremendously exciting to be a part of.
The company has invested in a wonderful new state-of-the-art factory in Slovakia, it has invested in fantastic new product with the new Cee'd that comes with 7-year warranty, it's investing in people - for example we've got Peter downstairs, Peter Schreyer designing the next generation of cars.
And we've got a brand that we want to develop from where it has been to a differentiated position in Europe, [differentiated] from other East Asian brands.
If you put all that together in the mix, then for someone in my position, you really couldn't ask for more. And it's going to be a lot of fun.
DL: Which national markets look strongest for Kia?
PW: The biggest volumes are in Spain, Italy and Germany. If you think about Italy and Germany, particularly about their domestics that are incumbent in those markets that is a super, super performance - we see a lot of potential there. But also we see potential in other markets like the UK and France. We're doing well in UK on retail volume this year - I think we're over 50% up year-on-year on UK retail sales. It's early in the year of course, but that's very encouraging and tells you that if we get the right product in the market at the right price then we have got an awful lot of potential.
Coming back to the product itself, if you look at Cee'd, its design and 7-year warranty, and line it up against competitors, it really is a strong and compelling proposition.
When I look at that car versus some of its Asian competitors, from a design point of view it's better, from a warranty point of view it's better and I think the potential is great. What I have got to do is make sure that the values of the brand are developed in line with the values of the actual metal and the warranty that we can put on that car.
It takes time. But look at the product and compare with Toyota, for example - the design and the package of the Auris versus the Cee'd….that's one of the reasons why I am sitting in Frankfurt right now. I just think the potential is very strong.
DL: Kia was said to have recently angered some dealers in Germany when Kia got involved in heavy discounting to internet brokers that undermined their sales. Can you comment on that?
PW: I heard about that, but the detail I really don't know. My understanding, very clearly, is that the company does not give any more discount to dealers - large dealers in big cities or chains or whatever. What you can quite often do is if you have some old models that you want to sell down, the dealers will place them with internet brokers. That happens all over the place. I can understand, of course, some people not being very happy about it but sometimes that's a fact of life with the modern distribution channels that can appear on the internet.
DL: It could be tempting to discount more generally at times in order to hit that ambitious European sales target though couldn't it?
PW: [laughs] I don't think that is really very sensible to do because once you start doing that you get yourself into a position….why would you do that in the normal run of business when you are investing so heavily, trying to build a brand? I'm afraid I don't really see that.
DL: How would you like to see the perception of the Kia brand change in the European marketplace?
PW: If you read any independent survey, our brand has been built around pricing and value for money. What we've got to do is remember that value is at the core of why we're here - over the next five years value will always be there - but we also have to hit harder is values of quality, values around what we're like to deal with as an organisation, that we're a trustworthy organisation and, importantly, we have to be seen with some aspirational and emotional elements.
The reality is that 'hygiene factors' such as quality are important, but they are seen as hygiene - you have to have differentiation for what you stand for beyond that and that's something I need to work on and that we need to define.
For me, it's early days but I think Kia can be a bit more challenging than some of the established brands, in terms of our tone of voice and how we say things.
If you look at some of the products that are coming, we can communicate those in a much more challenging way than perhaps we have done in the past. And that will give us a very youthful image compared with some of the established brands. It's very difficult if you are established to take people outside of their comfort zones, because you are worried about how it will be perceived. But if you are a growing brand like Kia you can take a few more risks - not silly risks, but you can take a few more risks. And you can have a bit more fun to make it more youthful and have a certain tone of voice that is challenging.
DL: What segments or models do you think are going to be most important in developing that new Kia image?
PW: Cee'd is fundamental to our long-term success - it's in a big segment and the cars are made in Europe, so that's really important. Going forward we have a 'soul' production concept that we will show in Geneva. That car doesn't really sit in any segment but it's a smaller car, a compact car and it certainly is a fun car with a very different design language. We want to communicate that in a different and challenging and innovative way.
DL: Soul looks, broadly speaking, to embrace some of the ideas behind Toyota's Scion brand in the US - aimed at 'Generation Y' consumers, with a high degree of accessorisation and customisation. When do you think something like that could actually make it to the market? And will it be coming to Europe?
PW: It is coming to Europe, but I'm not sure of the exact dates. We will be a bit challenging and innovative in Geneva with how we show the car. Do I think it will be a big success? I think some of the established car companies would kill for a mould-breaking car which is different and cross-straddles a number of segments. If we can position this car correctly it really could be a defining moment in our history.
DL: And it is aimed at these 'Generation Y' young consumers isn't it?
PW: When the car was designed that was the original concept but the truth of the matter is that these vehicles straddle different target groups. It is a youthful car and it will be communicated in a youthful way, but if we communicate it properly then a lot of people who are middle-aged but like to think of themselves as young will participate in purchasing these vehicles anyway.
DL: For Hyundai Motor in Europe there are two volume brands in Hyundai and Kia. How is a group-wide positioning strategy worked out to avoid excessive overlapping?
PW: I have not even looked at Hyundai brand values - I'm sure they are very clear and moving in a certain direction. All I know is that I'm really clear on what our [Kia] values are and what they need to be and I need to work on how to deliver that.
Of course, Kia and Hyundai have to be differentiated otherwise why would you have two companies?
We're smart enough to be able to do that.
You've got to differentiate the two. Volkswagen, for example, do it very well so why can't we?
DL: For you personally Paul, what do you see as the biggest challenge facing you in your job at the moment?
PW: My challenge is that I want to build a really strong team which works together, across all of Europe, to realise our goals around product, pricing, volume positioning.
My experience is that if you've got a good team and that team is led appropriately and in a very positive way, then you will be successful. Everything is about leadership and it's about the people. Ultimately, if you build a strong team you can do anything you want and have some fun at the same time.
And the team goes through a lot together - hard times, good times - and whatever we achieve in a professional capacity, it's the nicest thing to be able to say well, actually, I've made some great friends along the way, through work.