Kia Motors’ dealer association has demanded an immediate stop to the illicit yet customary practice of passing new vehicles off to dealerships before their official market debut, the Korea Herald reported.
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“We demand an immediate stop to the injudicious practice of sending off automobiles to dealerships before they are permitted to be marketed,” executive members of the association reportedly urged on their website. “How can we dream of becoming one of the world’s top five automakers if we continue to rely on this irregular practice that has led to a vicious cycle?”
The newspaper noted that Kia Motors, the affiliate of South Korea’s leading automaker Hyundai Motor, is suffering from stagnant domestic sales. This questionable practice also comes as its parent company has been accused of pushing off unsold cars out of factories to its dealers at the end of each month to keep command over half the market. Monthly sales records of domestic carmakers are calculated according to the number of new cars released from factories.
“Such distorted record-keeping will only damage the reputation of the top management and thereby hurt the dealerships and inevitably our market,” the association said, according to the report. It highlighted that consumers could lose the opportunity to make a purchase due to the limited number of available car models that can be found only in certain dealerships.
Citing industry sources, the Korea Herald said 20% of Kia’s sales throughout this year have so far been dependent on sales of pre-released vehicles. The carmaker has been struggling with sluggish sales mainly to due to a drop in demand for its recreational vehicles.
The Kia dealer association reportedly said it will consider reporting all unfair practices of the carmaker to the country’s Fair Trade Commission if no effort is made to correct the problem of passing pre-released vehicles to distributors.
According to the paper, as of 20 February, GM Daewoo Auto & Technology, Renault Samsung Motors and Ssangyong Motor respectively accounted for 59.4%, 58% and 58.3% of the total monthly sales volume. Hyundai recorded 55% and Kia 51.2%.
