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Quality over quantity for Kia

Renewed focus: Kia Motors Australia COO Damien Meredith said the car-maker will be pushing the Cerato small car harder this year.

Product-lead sales revival mooted as Kia shifts away from cheap and cheerful image

29 Jan 2015

KIA Motors Australia (KMAu) says it will focus on bolstering its line-up with high quality offerings in a bid to improve its standing with local consumers and finally rid itself of its cheap and cheerful reputation.

The South Korean car-maker has battled a somewhat negative brand perception since its launch here in late 1996, despite its current crop of models receiving wide praise for their design, improved dynamics and value for money.

With a longer history in Australia, sister brand Hyundai has managed to improve its image in Down Under in the 30 years since it set up shop, but Kia is yet to rise to the sales heights its Korean management would have planned.

Speaking with media in Melbourne last week, KMAu chief operating officer Damien Meredith said there was much work to be done to boost the brand's reputation in Australia, but indicated that it would follow Hyundai's successful lead.

“The brand at the moment is not in a strong position,” he said. “All the studies that we see and the feedback we get from reports shows we have got a hell of a lot of work to do. Again my emphasis is focussing on the product rather than the price and over time that is going to help.

“There is no question that Hyundai has been incredibly consistent with what they have done over a long period of time. We will be following that line in regards to our product message, our general communications message.

“There will be a lot more consistency with what we do. We won't be chopping and changing our communications message, we will be consistent in the marketplace and I think that will help.”

When asked what he would like the Kia brand to be known for in Australia, Mr Meredith said, like many brands, he wanted it to be recognised as a youthful brand, known for its “quality product”.

“The problem is that if you asked the person in the street, they still see us as cheap and cheerful and we want to get rid of that tag.”

Mr Meredith said a slow and steady approach was needed in Australia and added that it could take a while to build.

“We want to lift the brand again in a sustained manner. It's no good making it the flavour of the month and then 12 months later it's fallen off a cliff again. Brand perception and changing that doesn’t happen overnight.”

Mr Meredith said Kia will not engage in retail advertising of pricing to attract buyers, and highlighted the focus on high quality products over keen pricing and the work of technical consultant Graeme Gambold to hone the ride quality for local conditions.

“We are not going to grow the business quickly with strong retail messaging or programming, what we are going to do is focus on the product. We are going to focus on what Graeme has been doing for many years with the team. And we are going to focus on quality communication.” Kia's Australian sales took a six per cent slide last year, with a total of 28,008 units shifted - 1700 fewer than in 2013 and well off 2012's record haul of 30,758.

Mr Meredith conceded that Kia “can't keep doing that” in Australia, adding that the Hyundai/Kia sales split here is 75/25 per cent, whereas in most other mature markets it sits at 60/40 per cent.

He added that part of the key to addressing this disparity and gaining traction in Australia was a successful small car.

“What we have to do, we have got to be far stronger and more competitive in that small-car segment with Cerato. A lot of our focus is going on Cerato with our communications and we have been utilising some of the great things you [motoring media] have said about the vehicle over a period of time and that is going to continue – that is where we can grow our business.

“We need to at least be able to get Cerato up to 1000-plus a month sometime during 2015.”

The latest-generation Cerato hatch and sedan range went on sale in 2013 and last year recorded growth of 15.5 per cent for a 2014 total of 6679 units, however it still trails well behind major rivals including the top-selling Mazda3 (43,313) and Toyota Corolla (43,735).

Mr Meredith said he believed that Kia could still achieve its goal of a 5.0 per cent sales share in Australia, and added that it will not open more dealerships in a bid for a greater piece of the pie.

“Kia isn't strong in sales per dealer and we need to lift that significantly over time. We are not going to put on a lot more dealers around Australia.

There might be some in growth segments... but there is not going to be a mass increase in dealer points.”

New models will have an impact on sales, according to Mr Meredith, who said that the all-new Carnival that launches next month will knock the rejuvenated Honda Odyssey off its perch this year.

“I think Odyssey is doing quite well. We believe we can do a little bit better than that. Our expectation this calendar year, we expect 2000-2200 Carnivals.

That will probably give us market leadership in that segment.”

Mr Meredith said the sub-Rio Picanto was “likely” to arrive later this year, with the Korean-built city car filling a space in the Kia line-up left by the Rio that is positioned as a rival for larger light cars, including the Toyota Yaris and Hyundai Accent.

He added that the Sorento large SUV, due in April or May, will improve on the sales performance of the model it replaces.

“We have got big expectations on Sorento and we think it is a great package. We will price it correctly. In terms of volume we think we can do 3000-plus in a full year.”

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