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Kia chases 60 per cent sales hike

Under-achiever: Kia’s Cerato will be the focus of a concerted push by the Korean company to raise awareness of its products.

Korea’s Kia set to put the hammer down in Australia to lift both image and sales

9 Jul 2014

KIA Motors Australia (KMAu) is on a mission to lift sales by more than 60 per cent over the next few years by accelerating promotion of mainstream models such as the Cerato small car and Sportage compact SUV while fostering a more upmarket yet youthful brand image.

The importer is hoping to lift its annual sales from last year’s 29,778 vehicles to 50,000 units a year, taking its market share from today’s 2.8 per cent to about 5.0 per cent.

This objective will be aided by an all-new Carnival people-mover, Sorento SUV and revised Rio light car that are all in the pipeline for launch by KMAu within the next nine months.

A new 1.6-litre Cerato entry variant and a hybrid Optima mid-sizer sedan also have been mooted as potential starters in Australia by new KMAu chief operating officer Damien Meredith – formerly Hyundai Australia sales director – in a chat with journalists in Melbourne last night.

Mr Meredith, who has been in his new role for about six weeks after replacing Tony Barlow, said Kia had not been performing to its potential in Australia, considering its much improved product range.

He said Cerato’s 11th ranking in small-car sales was “unacceptable”, and he meant to address this issue, starting with new marketing programs soon.

“It deserves to be a lot better than that,” he said, adding that he wanted to see each of Kia’s models in at least fifth position in their segment in a move that should give Kia about 5.0 per cent market share compared with the current 2.8 per cent.

 center imageLeft: KMAu chief operating officer Damien Meredith.

“If we asked 10 people what a Cerato is, we would probably get one who knows what it is,” he said.

“So I think we have to work harder at getting the models that compete in the big segments to the public, to have them understand what is in the car, how they were designed and the value that they give.”

Asked if he would consider a more affordable 1.6-litre Cerato variant to generate sales at the bottom end of the small car market, Mr Meredith conceded his product planners were already looking into it.

“It would be a bit of a circuit-breaker for us with that, but it is in the early stages,” he said. “I would love to have a 1.6 to sharpen it (Cerato) up, and get a price-leading situation.”

The Cerato hatch and sedan range currently starts with the 1.8-litre S at $19,990.

A hybrid version of the Optima – already available in overseas markets – is also on the cards within the life of the current model that was launched in Australia in 2.4-litre petrol form early this year.

In a wide-ranging discussion about all things Kia, Mr Meredith said KMAu was considering:Adopting an industry-leading seven-year warranty (current leader is Citroen's six years for its DS line and C4 Grand Picasso people-mover).

Establishing its own “captive” finance division in co-operation with Hyundai Capital to replace the current arrangement with St George Bank.

Using its Australian Tennis Open sponsorship to generate more sales leads.

Part of Kia’s new image-building campaign will include promotion of Kia’s local chassis development program by consulting engineer Graeme Gambold, emphasising the “engineered for Australian roads” pitch.

Mr Meredith said the gap in Australia between Kia and its sister brand Hyundai was the biggest in the world.

He said his bosses in South Korea had made it clear that they wanted Kia to reduce that gap from the current 75/25 ratio of Hyundai/Kia sales to more like 60/40.

“Hyundai in Australia will sell 100,000-plus cars this year and we will sell 33,000 cars,” he said.

“So, in normal mathematics, if Hyundai was selling 100,000 cars in some other market, Kia would be selling 60,000. So, we have got a fair bit of work to do.”

Mr Meredith said Kia would not target Hyundai for conquest sales, except for “some “friendly fire, as we call it”.

“For us to grow our business, we obviously have to conquest business from the Japanese and the Euros,” he said.

But Mr Meredith said the company would aim to move away from its “cheap car” reputation to a higher plane by focussing promotion on the quality and design of Kia’s “award-winning” products, plus their value.

“We have probably been ‘on sale’ for too long,” he said. “We have changed that focus. We want to get the consumer in touch with our brand and in touch with our product, and I think that is incredibly important.

“You won’t see on television a Kia retail ad. We will compete very hard at the press level and on the radio level and the digital level, but on television, all you will see is brand and product.”

This year, Kia sales are up 0.2 per cent, by Mr Meredith said the company should do better than that in the second half, to end the year with about 33,000 sales.

However, Hyundai is expected to top 100,000 units for the first time this year, with sales currently running 3.4 per cent above last year’s rate.

Mr Meredith said Kia’s would seek a “young at heart” brand image to appeal to younger people, in the hope that once young buyers are won to the brand, they will stick with it.

He said Kia had been known as a “cheap and cheerful motor company” in Australia.

“It is time we changed that,” he said.

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