Kia is cutting back on unprofitable fleet business in order to refocus on becoming a ‘top ten’ UK retail player by 2012.
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Speaking at the Frankfurt Motor Show, newly installed UK sales director Yaser Shabsogh explained that the South Korean brand had already realigned its sales mix from 2006’s near 50/50 retail/fleet sales split (and number 16 fleet manufacturer sales spot).
Shabsogh told just-auto: “Last year’s sales increases involved many quick-churn sales. Now we’re 70/30 in favour of retail – which is a about right – so it’s been a significant shift. We want to move from being a top 20 retail player to a top 10 one in the next five years.”
New Marketing director, Simon Hetherington (who, like Shabsogh, joined the company in July) confirmed that Kia would do “less sales volume this year as a result of cutting back on unprofitable fleet business.”
In 2006 Kia UK sold close to 40,000 units, but in 2007 both directors predict only 31,000 sales before rising back up towards 40,000 in 2008 on the back of new model introductions, more dealers and a reorganised fleet structure.
An estate version of the acclaimed Cee’d five-door hatchback, the Cee’d SW, went on sale September 1 and will be followed by a sportier three-door version, called Pro_cee’d, a significantly facelifted Picanto city car and model-year change Sportage small 4×4 – all due by January 2008.
The new Sportage will be built in Europe and offer a two-wheel drive version (both for the first time) while a diesel automatic will once again be an option.
A green-friendly Cee’d – based on the EcoCee’d concept shown at Frankfurt – could also go into production inside 12 months. It boasts 44% more miles per gallon (up to 72mpg) and 37% less CO2 emissions (down to 104g/km) by utilising a different version of the 1.6 diesel engine, smaller wheels, thinner tyres, lower suspension and a flat under-tray for less drag, plus weight reduction measures too.
A Kia spokesman explained the rationale behind the move: “Every manufacturer needs a short-term environmental solution and the EcoCee’d is ours. It is attractive to customers and crucial to our green success.”
Further down the line in early 2009, Kia will produce a Fiat Panda 4×4-sized small ‘mini-MPV-cum-4×4’ based on the Soul concept shown at the 2006 Detroit motor show, and possibly a halo coupe by 2010 strongly reflective of the Kee concept unveiled at the 2007 Frankfurt motor show.
Beyond product, Shabsogh is planning what he terms a “sustainable” fleet programme targeting small-to-medium businesses through carefully trained dealers as well as some ‘direct’ and daily rental business. 25 of the 140-strong dealer network have already been designated as ‘business centres’ better able to cater to fleet owners and five more will be signed up soon. The total network will also expand to 180 or so in the next 12 to 18 months.
Hetherington said Kia is changing the way it markets its brand to help the new products: “If we have an image now, it’s as a budget motor, but we’re moving away from that.”
He also said Kia would start stressing more strongly the difference between it and sister brand Hyundai (that it shares platforms with). “Kia and Hyundai marketing are now run separately as global businesses. Both brands will remain mass market, but Hyundai will be for the more mature customer while Kia will focus heavily on ‘cut-through’ design to appeal to a younger at heart, more dynamic customer.”
Guy Bird
See also: FRANKFURT SHOW: Kee concept heralds ‘new look’ for Kia
FRANKFURT SHOW: Kia plants new cee’d
