Kia had a busy time in Geneva this week as it unveiled its new frugal Rio and the redesigned Picanto. Simon Warburton talked to Kia’s UK managing director Michael Cole, who noted his only real problem was the Slovakian plant being at full stretch to meet demand.
j-a: How do you see 2011 panning out for Kia?
MC: This year we have replaced the A, B and D segments. For the B segment alone the UK is one third of sales in the market – Rio is very important.
j-a: Has scrappage finally gone out of the sales mix?
MC: There has been an assumption that our success has been on the back of scrappage, but that is not the case. Last year, if you strip out scrappage, we did 3.2% – we expect to get 3.9% this year – that is very achievable.
The first thing is to make sure you don’t go backwards. We did 12,000 units of scrappage last year, so to stand still we need to do 12,000 more this year.
j-a: British consumers are being hit with increased VAT, a squeeze on pay and higher fuel costs. How can Kia react to those cumulative challenges?
MC: If people are more conscientious and looking for brands that are value for money, you could argue it is a market that suits us better. VAT [increase] at 20% did not really have an impact. The risk is we can talk ourselves down with the news about negative GDP. [UK has recently posted negative growth]
j-a: Is the seven-year warranty here to stay or was that a temporary marketing measure?
MC: Seven-year warranty is part of what we are now. It is a strategic programme, not a tactical offer. There is absolutely no doubt the seven-year warranty generated huge interest in the brand.
j-a: Fuel prices have been rocketing skywards recently, what is your take on how consumers are reacting to increased petrol prices?
MC: Whether a barrel of oil is US$100 or $120, I don’t think it has an impact on our industry in the UK. I am a believer there is so much you can do with conventional technology.
My bigger concern is interest rate rises – would that put a dent in consumer confidence?
j-a: Are you satisfied with your dealer network?
MC: We have nine dealer open points and once we get that down, we are happy, we just need to plug a few points.
j-a: How does Kia UK fit into the European environment?
MC: We do 20% of Western European volume with 56,000 out of 258,000 [cars]. European target this year is 285,000. We did 56,000 units last year and we have set 57,000 units this year.