Kia Motors is to set up its own factory-run distribution operation in Australia from 1 March 2006.
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The ‘factory shop’ will take over from Ateco Automotive Pty Ltd, which had a fixed five contract that ended on 28 February 2005, but has been given a one year extension for the handover process.
During its five years distributing Kias, Ateco has boosted sales from around 5,000 units a year to nearly 25,000 in 2004 with a 2005 target of 30,000 units. Kia is now one of the top ten best-selling car brands in Australia and its Carnival (Sedona) is the number one MPV (minivan), the Pregio the top diesel van, the K2700 the top light truck and the Rio the third most popular small car.
The revitalized dealer network consists of 118 outlets and regional offices were established in Brisbane, Sydney, Melbourne and Perth.
Ateco will remain Kia’s Down Under distributor until 1 February and plans to launch the new Sportage SUV, K2700, Rio, Optimal and Carnival before completing the handover.
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By GlobalData“The decision to take over the business is part of a global policy by Kia to own its own businesses in markets of more than a million units a year,” Ateco spokesman Edward Rowe told just-auto.
“Kia regards Australia and New Zealand as a single market, taking the total volume above the critical one million units.
“This is not an unexpected outcome for Ateco. It is very much in the nature of our business that we take on businesses at a low ebb and then develop and grow them to a strength and size where we either sell them or pass them on the parent company.
“This has happened with Volkswagen, Audi and Suzuki since 1985 and we have a continual process in place where we are looking for new businesses to acquire and develop. At the moment we have around half a dozen projects in various stages of development which we are progressing towards new development opportunities for Ateco.”
Ateco also distributes Alfa Romeo, Citroën and Fiat commercial vehicles, in Australia as well as Alfa Romeo, Fiat cars and Fiat commercial vehicles in New Zealand.
Of its Australian staff, 26 people work specifically for Kia and their future will be discussed over the coming year.
