Kia won't become SUV and ute brand

KIA Australia will not abandon passenger cars despite the market begging for more SUVs and utes.

 

The South Korean brand has a number of SUV models already on its books, but there are more in the works – and the company will add a new ute model to its ranks in the next 24-36 months, which it expects to account for more than 20,000 sales a year.

 

But newly appointed local CEO, Damien Meredith, has confirmed that passenger cars will remain an important – if small – part of the line-up in the coming years.

 

“I can assure you that in, at least, the next decade, there will be passenger vehicles in our line-up,” said Mr Meredith.

 

“I think that our small passenger cars Picanto, Rio, Cerato, formed the foundation of our growth. They kept us going as new product came to the areas that we didn’t have product,” he said, referring to the late arrival of the Seltos small SUV and Stonic light SUV, in particular.

 

“It’s been really important to us, and specifically Picanto and Cerato, will continue to be important for us,” he said, referring to the news that the Rio hatchback will not continue on in Australia when the new-generation version arrives.

 

Not only is Rio on its way out, the Stinger’s time is over as well. So, that leaves only the Cerato small hatchback and sedan, and the Picanto micro hatchback – which is set to be facelifted and updated toward the end of this year – which dominates its segment, fighting only against the Fiat / Abarth 500 models.

 

“We are pretty confident that both the Cerato and Picanto will continue to sell reasonably well over a long period of time. They’re not going anywhere,” said Mr Meredith.

 

“It’s been one of our great strengths. Other manufacturers have deserted those segments and continued to play along in those areas.”

 

A look at the Micro segment shows that the Mitsubishi Mirage has done its dash in that part of the market, while in the Light Car space where the Rio has played, the casualties over the past two years include the Ford Fiesta, Hyundai i20 and Suzuki Baleno

 

Mr Meredith applauded the job of brands like MG, which dominates the Light Car segment with the MG 3, currently accounting for 44.6 per cent of that part of the market, year-to-date (end of May).

 

However, as the man tasked with growing the brand’s presence on local roads even further, Mr Meredith suggested that he can see scope for even more sales in the passenger car segment.

 

“I think we can improve in every segment that we compete in. Whether it be with Picanto, with Cerato. Picanto is going okay, supply is okay,” he said of the 2598 units of that car sold so far in 2023.

 

“Cerato supply is terrible. I think last month we did about 600. We could probably add another 1000 to that,” he said.

 

The exact number for May was less than that, at 552, and year-to-date the tally is just 2216, which is a far cry from the same period of sales last year, where the brand sold 5878 examples – representing a huge 62.3 per cent drop year-on-year.

 

“But I’ve never seen so many supply chains broken as what has happened in the last three years. So, it’s really hard to put a finger on it. But I think we can improve in every segment we’re in. As we say when we meet with Korea, please just give us the product and we’ll do the job,” he added.

 

“Have a look at our sales mix, it’s pretty even. You know, it’s seven per cent, six per cent, eight per cent (as a percentage of total sales per model in the mix). We’re not the Ranger car company, or something like that. They’ve done that, and they do a very good job of it. But that’s their strategy - our strategy is, and it has to be, because of supply, is to get all of our models firing.

 

“Carnival has been a huge success, for example, because we can get Carnivals. We’ve been able to transfer Carnival to a bit of that upper-level SUV segment and we’ve done reasonably well. The amount of Carnivals we’re selling used to be the whole people-mover market. So, we’re pretty happy with how that’s going, but everything could do better with better supply,” said Mr Meredith.

 

To the end of May 2023, Kia Australia has sold 31,609 vehicles – a modest increase on the May 2022 tally (30,939).

 

The brand’s best-selling model so far this year is the Sportage midsize SUV (5332 sales), followed by the Carnival people mover (4692), Sorento large SUV (4673), Seltos small SUV (4283), Stonic light SUV (3032), Picanto micro car (2598), Rio light car (2414) and Cerato small car (2216).

 

The outgoing Stinger has done 1252, while the brand’s new-energy models – which are severely supply constrained – have accounted for slim sales, with Niro at 736 units and EV6 tallying 381 sales.