Paul Philpott: "Kia is capacity constrained in Europe"

Paul Philpott: "Kia is capacity constrained in Europe"

Paul Philpott, Kia UK President and CEO, believes that the integration of offline and online 'customer journeys' is the key to meeting future customer demands.

“We know that there is much more activity on the Internet these days, of course,” he says.

“But the dealership remains central to the buyer and to the customer experience and the ownership experience,” Philpott maintains. “Respected local dealers remain a vital part of the process and the experience that we want customers to have of the brand. The integration of offline and online elements is key – both need to be very good.”

Warming to the theme of 'clicks and mortar', Philpott cites the example of consumer banking in the UK. “You can see a trend towards some banks now wanting to re-establish a presence on the High Street. Internet banking is not inconsistent with that, but that human element, a place where you can physically go and speak to someone, that is a part of building credibility and trust. The online element alone does not deliver those human and physical elements. And that's where a great dealership with a great reputation for delivering service comes in and enhances the overall customer and brand experience. 

“The online and offline aspects to the whole experience have to be complementary. Offline elements like servicing, part exchange, test drives for prospective new cars – they are all important and we are constantly reviewing all of these elements and how they relate to the whole customer experience and the perception of the Kia brand and what we deliver.”

A core part of the seamless offline-online integration process is speed. “Fast response is vital,” says Philpott. “If someone expresses interest online, we need to get back to them very quickly and with an appropriate response to take the process further.”

Some Kia dealers, for example, are taking demonstrators for test drive to prospective buyers' homes in the evenings. “That can work very well and is the kind of thing we like to encourage, where it is appropriate,” says Philpott. “It's about the level of service that we strive to provide and that becomes associated with our brand – the brand values. 'Try before you buy' is still an important retail principle. We want the prospective customer to be able to have a good online experience, be able to configure a car online easily for example, and then move on to a real-world experience that complements that as part of the overall customer journey.”

What about a low-price Internet-only model variant that can be offered direct to the online customer  and bypasses traditional distribution costs (Vauxhall tried it around ten years ago)? Philpott is sceptical. “People don't really want low-spec, or the perception of low-spec, in developed markets like the UK,” he says. “Look, for example at what is happening in the B-segment these days and the high level of specification for small cars now. I don't think that is the way to go.”

Kia is keeping an eye on changing patterns of car ownership and usage – the rise of car sharing in urban areas. But Philpott is pragmatic about how car ownership patterns might be changing and what that might mean in the marketplace, how disruptive it could really be. He doesn't see fundamental change overnight.

“It is perhaps a little bit analogous to the way things are going in the powertrain area – with lots of niches according to different needs and requirements in the market, which the different product offerings can match,” he says.

“When it comes to changing patterns of car usage and ownership, each has its place. Car sharing is an emerging niche in metropolitan areas, but outside of big cites, less so. We have to make sure that what we offer is absolutely aligned with different market needs. But the majority of customers will continue to lease or buy because of the freedom and confidence a car gives you.”

“Young people, particularly in cities, may not be interested in cars as early as they once were, but wait until they are a little older and have families. Their kids will want to be driven here there and everywhere at all hours of the day and night.”

Kia is growing volume and share this year in Europe and in the UK. Sales in the first quarter in in Western Europe were up 3% (in a market down 10%) to almost 83,000 units. Kia sales grew 12% in the UK in Q1, 3% in Germany and 22% in the troubled Italian market.

Philpott said that growth will only slow as the Korean company runs out of global capacity.

“All our plants are running flat out and if this continues then there will have to be a decision within the next 18 months to two years about increasing capacity. Until then we will concentrate on improving quality even more and retaining our existing customers.”

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