Kia ponders seven-year warranty

KIA Motors Australia (KMAu) is doing the sums on a potential industry-first seven-year warranty on its car range as one way of convincing potential buyers of the quality of its new-generation vehicles.

If it gives the new warranty the green light, Kia will eclipse the six-year warranty offered on some models by French importer Citroen.

New KMAu chief operating officer Damien Meredith confirmed last night that the ground-breaking warranty was under consideration by the South Korean importer to replace the current five-year, unlimited kilometre warranty.

Mr Meredith, a former sales director for Hyundai in Australia, said Kia had to shed its “cheap and cheerful” image in Australia and build a new foundation for growth.

He said Kia had changed its marketing focus to convey the message to consumers that Kia has a quality range with great value.

Asked if a seven-year warranty could be part of that, Mr Meredith said: “We are thinking about it, and we are doing the sums on it. When you are 2.8 per cent (share) of the market and you want to grow that share, you have to differentiate.

“We would like to think that if that (seven-year warranty) come to fruition it would be one of the major differentiators for us, not only to get people into dealerships to buy our product but also to help with the residual values of our vehicles over a long period of time.

“We think it will have a dual effect.” Kia already offers capped-price servicing, which Mr Meredith said had the effect of enhancing the brand.

Mr Meredith said Kia had to let potential buyers know that the brand had a quality range, and it would do this by focussing on three areas: the design and quality of its award-winning products, the value each Kia represented and the Australian chassis development program that tunes each Kia car for Australian roads.

“These three major aspects will be the basis for the growth of the brand going forward,” he said.

Mr Meredith said Kia was aiming to increase its sales from the current 30,000 units to about 50,000, raising its market share from the current 2.8 per cent to just under 5.0 per cent over the next few years.

“The reality is we are 2.8 per cent of the market,” he said. “That is a minnow in the ocean.

“We have to build our business slowly, surely … build a foundation and make sure that we are doing the right thing by the customer, the right thing by our dealers and the right thing by us.

“I was over in South Korea last week with the CEO, and I have to say they want to see the Australian part of their market grow, but not grow in a silly fashion, that we have a really strong foundation.” Mr Meredith did not say when a seven-year warranty would be introduced if it got the green light.