Kia sets 39,000 sales target for 2016

KIA has announced a target of 39,000 units in Australia this year, a number it expects to achieve on the back of important new-model launches, consistent marketing and ongoing improvements to its customer and after-sales service.

The South Korean car-maker had a record year in 2015, shifting 33,736 units or 20.5 per cent more than its 2014 haul and toppling its previous best sales result of 30,758 in 2012.

Kia Motors Australia (KMAu) chief operating officer Damien Meredith confirmed the new sales target at the 2016 Sportage launch last week and detailed the products that will help the company achieve its goals.

“This year we expect to do 39,000,” he told journalists in Ballarat. “Now that is a lift of 15.6 per cent. Saying that in volume terms, the measure of lifting to 39,000 is less than the extra cars we sold in 2015 so we are relatively confident that the 15.6 per cent lift will be gained by new entries.

“Obviously Sportage, Picanto in a few months time and then a pretty major uplift in regards to Cerato. From a product point of view there is a lot coming.” The sales increase will bring Kia's overall market share from its 2015 high of 2.9 per cent to “just a bit over 3.5 per cent”, according to Mr Meredith, who has previously stated that the car-maker wanted to reach 50,000 annual sales and a 5.0 per cent market share in the coming years.

“We believe it will be another growing, good, consistent year for Kia in Australia.” Mr Meredith added that he did not expect Kia to crack the top 10 with its expected 39,000-unit haul in 2016.

Left: KMAu chief operating officer Damien Meredith. “We finished 12th last year. We think we will be around about 11th or 12th again after 2016. We don’t really set ourselves the ultimate goal of top 10. We want to grow the brand, grow the volume in a very set, orderly manner and we have started that journey. We intend to keep on going.

“If it happens, great. It’s not something that we consume ourselves with. What we consume ourselves with is growing the business in an orderly fashion.” Last year Kia missed out on a top-10 placing by about 7000 units, with Mercedes-Benz keeping it bay in 11th spot with 36,374 sales and Honda holding on to 10th place with 40,100 units.

Mr Meredith said KMAu was pleased with its placing in the JD Power Customer Service Index rankings where it rose from ninth place in 2014 to fourth overall in 2015 to leapfrog Subaru and sister brand Hyundai, and added that the company would continue to focus on and strengthen after-sales service levels.

“Another thing that we will continue to focus on will be our consistent marketing. Focusing on product rather than price. That has been in play now for over 18 months. We believe with the quality of the product we have got we can continue down that pathway.” While the updated Cerato, new Picanto and fourth-generation Sportage will help lift volumes in 2016, a full year of Sorento, Carnival and Optima are also likely to help.

Although it has not been officially locked in for Australia, the forthcoming Niro compact SUV will also help, and while it is unclear when it will arrive, Mr Meredith said he would like it here the “sooner the better”.

“It is in the plan, it is on the wish-list, we have just got to get it.” Kia has so far only announced hybrid drivetrains for the Niro, but GoAuto understands more traditional internal combustion units will also be offered.

Asked whether coming late to the segment would make a difference to consumers, Mr Meredith said he thinks “it always makes a difference”.

“I think it is always great to be ahead of the curve. With that segment I don’t think we were but we have just got to focus on what we have got and optimise our opportunities there and we are pretty confident we can continually grow the business in an orderly manner.” Mr Meredith said he thinks it would be possible to achieve similar sales numbers for the Niro as the instantly popular Honda HR-V and Mazda's CX-3, but it would depend on the overall package.

“If you put together a package of great product, great spec and competitive pricing I think you can do those numbers. We moved Cerato from 11th to sixth in the small-car segment by focusing on the product. And some pretty smart advertising and putting together a good sales package.

“Bear in mind sales are up 44 per cent with Cerato and the market was down about five per cent. You can do it, you just … the planets have to align.” In their first year on sale the CX-3 found 12,656 homes and the HR-V sold 10,899 units, ensuring they were the third and fourth best-selling models in the competitive small-SUV segment.

Despite the Carnival people-mover receiving a disappointing four-star ANCAP crash safety rating at the start of 2014, Mr Meredith said the result has had little impact on sales.

“It’s 35 per cent of the people-mover market. Which is the leader of the people-mover market by a long way. Humbly, we haven’t had any problem with the four star. I mean four star, five star are safe cars. That's one thing we need to make pretty clear.

“The second thing, Carnival is such a compelling package, that it was always going to be dominant in the people-mover market and that is what has happened. It has been very good for us.” The Carnival lost vital points for not offering a second-row seatbelt warning buzzer, as well as “significant footwell deformation” in the frontal offset test, Mr Meredith said a fix is about a month away from being finalised before ANCAP can re-test the car.

Mr Meredith said Kia's sponsorship of the Australian Open tennis championship – now in its 15th year – has a positive impact on the brand and on sales, particularly in Melbourne where a large and highly visible fleet of Carnivals and Sorentos ferry players and officials around during the tournament.

“In Melbourne during the Australian Open our floor traffic is always up,” he said.

“What you have to do is take advantage of that. Those cars are very visible in Melbourne metropolitan. Obviously we advertise because we have got to protect our investment in the Australian Open and we always do a localised campaign in Melbourne which at the moment is an accessory program for $777 worth of free accessories.” Kia uses the number seven heavily in special deals to highlight the seven-year unlimited kilometre warranty, seven years of roadside assistance and seven years of capped-price servicing.