Kia’s UK boss tells just-auto that Kia in Europe, along with Hyundai, is contributing hugely to the European economy and that Kia is seriously eyeing a move into motorsport.
Kia’s UK president has hit back at suggestions that South Korean car companies are stealing jobs and sales from European brands.
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Paul Philpott, a former head of Kia Motors Europe, said that the presence of his company, along with sister band Hyundai, is providing hundreds of thousands of jobs in the region and paying millions of euros in taxes.
Kia and Hyundai are two of Europe’s fastest growing brands but The Koreans came under fire from French politicians at last September’s Paris Motor Show for “stealing French jobs” and more recently from Fiat and ACEA (the European manufacturers’ association) chief Sergio Marchionne who has criticised a new Free Trade Agreement between the EU and South Korea which he said opened the door to cheaper imports.
Philpott pointed to a report by London Economics, published in February, which said that up to 107,000 people owe their jobs to the presence of Kia in Europe and, including customs duties, sales and income taxes, the South Korean company contributed EUR746m (US$975m) to European governments.
He added: “We have invested in a factory in Slovakia which produces gross value added of almost EUR360m (US$470m) from a turnover of EUR3.3bn (US$4.3bn) and which employs 3,905 people. It also purchases supplies worth EUR2.1bn (US$2.7bn) from within Europe.”
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By GlobalDataOn top of this, he said, could be the operations and contributions from Hyundai which has a factory in the Czech Republic. Between them the two brands are assembling almost 600,000 vehicles a year in Europe. Philpott added: “I think we are making an enormous contribution to the EU economy.
“We have also just recorded an increase in sales in Western Europe of 3% in the first quarter of this year to 82,901 vehicles which goes to show that we are also making cars that people want to buy.”
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.”
With many European car chiefs admitting that they are looking over their shoulders at the Koreans, who is Kia worried about?
Philpott said: “I don’t think we are looking over our shoulder at anyone at the moment. In the US we are slightly down because the Japanese are now biting back after a couple of tough years for them. Dacia might have hurt us had we remained a budget brand but I suppose the only worry is if everyone decides to go for a seven year warranty or if we fail to move on in terms of new models or design.”
Kia’s seven-year warranty was introduced almost seven years ago with the first Slovakian-built cee’d. Philpott said that the first six years had not thrown up any “time bombs”.
“The assumptions we made have proved to be correct and the warranty has been a strong basis for customer confidence. This has never been a gimmick or a tactical, promotional tool – it is core to our business and shows our confidence in the quality of our vehicles.”
Kia eyes a move into motorsport
Kia is also looking at entering the motorsport arena and the Touring Car Championship is seen as a “very interesting” prospect.
Philpott is keen to emphasise the sporty nature of Kia, particularly to help differentiate it from its more conservative sister brand, Hyundai.
However, it is Hyundai which has the Veloster sports coupe and is re-entering the World Rally Championship with its i20.
Philpott said: “Motorsport is an interesting proposition for us and Touring Cars is an interesting area that we are looking at. It will help set the two brands apart and would help increase awareness of Kia.
“From a global perspective, Hyundai is perceived as more premium, luxury and with an older buyer profile. Kia is the slightly younger, sportier sibling. I would like to see something a little more sporty about the brand, I’m not saying everything should look like a coupe, but there are niches we can explore such as our B-segment SUV concept that we showed at the Geneva Motor Show.”
Another important differentiator between the brands will be the appointment of Kia’s design chief Peter Schreyer to oversee the styling of both. Philpott, who has also headed up Kia’s European operations, said: “Peter has created a recognisable design face for Kia and he can now start to address the differentiation between the products.
“When you are sharing platforms and components the only differentiator is design and despite the success of Hyundai and Kia in recent years the look of the cars has perhaps been a bit too close.”
