Kia Motors is celebrating its 60th birthday but it still wants to be Young, Sporty and Friendly. That’s the tag it is putting on its long-term plan to change what is still a poor brand image. The company is currently working on a brand slogan to get the message across, writes Chris Wright.
KIA’s global plan is to unify the look of its dealers, improve its model line up and there is a goal to achieve Toyota levels of quality by 2007, according to Thomas Oh, director of the overseas planning group.
Then there’s production capacity. Hyundai Motor Group is pushing ahead with new plants in almost every corner of the globe – two in China, one in the United States and one in Slovakia.
It plans to become a global top-5 car producer, taking advantage of increasing market demand in China and Eastern Europe. India, Brazil and Russia.
By 2010 Hyundai and Kia will have increased production capacity to 1.36 million cars a year, up from 530,000 now and only 23 percent of these will be sold in South Korea.
Things are going pretty well in developed markets with strong sales for both brands in the United States while Kia is the fastest-growing brand in Europe. It’s work in progress, however.
The most pressing need is to differentiate the brands – something that is increasingly becoming an engineering issue according to Hyun-Soon Lee, senior executive vice president of powertrain at Hyundai Motor Group’s Namyang research and development centre.
He said: “We are developing an image for Kia around a Young, Friendly and Sporty theme. We have to ensure that is how the brand’s models are differentiated from Hyundai.
“We have to engineer Kia powertrains to be more fun to drive than Hyundai. This will mean tuning modifications to make engines more powerful and rev more highly while gearshift needs to be more aggressive.”
The issue is further complicated by the fact that Hyundai is the brand with the sports coupe and will be competing again in the World Rally Championships.
“This is also an issue we need to address,” added Lee. “We are looking at motor sport programs for Kia in the future but as yet we have not identified which formula to enter. We are also looking long term at a sports model, including a convertible, based on the KCV III concept we showed at last year’s Frankfurt Motor Show.
“But with both these things we have to look to bigger volumes and better profitability to support such programs.”
Both these are growing, according to Thomas Oh director of the overseas planning group. Since the Korean financial crisis of 1998, worldwide sales have risen from 750,000 vehicles to almost 1.4 million while revenue has grown from $7.6 billion in 1999 to $10.7 billion last year.
Oh added: “Exports have risen 38 percent in this time and our efforts in improving quality are paying off. The Hyundai-Kia motor group expects to be in the top 5 global automakers by 2010 behind GM, Ford, Toyota and Volkswagen Group.
Kia’s global plan is to unify the look of its dealers, improve its model line up and a goal to achieve Toyota levels of quality by 2007, according to Thomas Oh.
Kia KCV III Concept
This is being backed up by a global advertising campaign using tennis star Andre Agassi and the sponsorship of major sporting events such as the Australian tennis open.
Kia aims to stay on track as Europe’s fastest-growing brand by introducing seven new models over the next six years and is extending its Circle of Excellence programme, piloted in North America, to its 1,150 dealers in the region.
That number is planned to grow to 1,850 by 2010 by which time Kia’s new factory in Zilina, Slovakia will be on line producing 200,000 vehicles a year with the possibility to increase output to 300,000 depending on market conditions.
Under the Circle of Excellence program dealers will be expected to make quality improvements including the standardization of facilities, a cornerstone of Kia’s requirement to establish a stronger brand image.
Oh said: “We need to expand and improve our sales network in both quality and quantity and renew and re-enforce our model line-up to achieve a premium brand image.”
Speaking at Kia’s global distributors’ meeting in Seoul he added: “We also need to increase customer loyalty through better quality at our dealers and improved aftersales service. To do this we are developing regional strategies to meet market demands.”
European dealers will be expected to invest in upgrades for their premises aimed at unifying the Kia image worldwide. This will include new signage and ‘totems’ or pylons displaying the name sign in a new ‘Kia Red’.
There will also be conformity in the colour of dealer buildings in grey and silver. “At the moment we have no guidelines as to what colour the buildings should be and they are different around the world,” said B H Lee, director of the overseas marketing group.
New dealer standards will also include basics such as stationery and interior graphics as well as showroom reception, sales and service desks, ‘image walls’ and sign illumination.
Lee added: “Dealers will have to be uniform and modern to strengthen our brand image and differentiate Kia from other car makes.”
European chief Jean Charles Lievens said that most of Kia’s dealers in the region are private entrepreneurs and they will be expected to make the investment over the next few years.
The number of dealers would grow to 1,350 by the end of this year, he said, rising to 1,850 by 2010 backed by an improved model line up.
“Until recently Kia could only compete in around 35 percent of the market segments in Europe but we are gradually expanding the model range to allow
us to compete in 90 percent of the segments.
“We will also be investing in sponsorships and PR to strengthen our position as the fastest growing brand in Europe and we fully intend to keep growing. Our vehicle designs are becoming more European and the new model to be built at Zilina will be designed specifically for the European market.”
The model range will be strengthened with the unveil of the new Sportage SUV at the Paris Motor Show in September which goes on sale in Europe in 2005.
Kia will also show its JB concept at Paris, the basis for the next generation Rio.