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September 23, 2009

UK: Kia chief backs scrappage extension call

Kia Motors' UK chief Michael Cole is supporting automakers' trade group SMMT's attempts to persuade the government to extend the taxpayer-funded scrappage scheme until its original end date of February 2010 rather than ending when the GBP300m fund runs out, now estimated to be by the end of October.

Kia Motors’ UK chief Michael Cole is supporting automakers’ trade group SMMT’s attempts to persuade the government to extend the taxpayer-funded scrappage scheme until its original end date of February 2010 rather than ending when the GBP300m fund runs out, now estimated to be by the end of October.

The SMMT estimated the scheme had generated 100,000 sales plus an additional 100,000 pending orders.

“Extending the scheme will give us a good start to the year and I think that we will start to see a genuine recovery from the third quarter of 2010 onwards,” he said at the launch of the updated Slovakia-built Ceed range in Liverpool.

He said the average transaction price of a Kia sold under the scrappage scheme was GBP8,500 which meant the government received some GBP1,200 in VAT (sales tax) on each deal.

“And we’re at the lower end of the price scale.”

While the scrappage scheme has helped boost Kia sales by some 30%, “our sales won’t fall off a cliff when it ends”.

New product and new dealers will be key to getting customers into the showrooms, said Cole.

“We have 140 dealers at the moment and we will have 150 by the end of the year.

“New Venga, Ceed and facelifted Sorento will all help drive our business in 2010 and then we have our new B-segment Rio replacement in 2011.”

The Venga, a B-segment crossover, was unveiled at last week’s Frankfurt motor show. Cole described it as a more traditional or conservative offering than the Soul and a practical car that would appeal to a different type of buyer by competing more closely with the Honda Jazz (Fit), Ford Fiesta and Citroën C3 Picasso. “It straddles the B+ and B+ MPV sector,” he said.

It goes on sale next February. By 2012 the Soul, launched earlier this year, will be the oldest car in the Kia line-up.

Cole, who joined Kia from Toyota in June, said that one of his priorities would be to focus on fleet sales and boosting sales in the B segment.

“We only have a 1.5% share of the B segment and a 2.3% overall market share while our fleet share is 1.2%.”

Kia’s share of the retail market has climbed to 3.4% and is continuing to grow, added Cole.

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