Local Kia Seltos expectations limited by supply

KIA Motors Australia (KMAu) has been forced to temper its expectations for its crucial, all-new Seltos small SUV, which will be subject to supply constraints for at least the next 12 months.

The South Korean car-maker has outlined its sales aspirations for the Seltos in Australia, hoping to sell around 650 units per month, which translates to 7800 annual sales and eighth position in the sub-$40,000 small-SUV segment, trailing the likes of the Toyota C-HR, Honda HR-V, Subaru XV and mechanically related Hyundai Kona.

Speaking to journalists at the launch of the Seltos in Noosa, Queensland, KMAu COO Damien Meredith said the brand’s conservative sales targets are a result of supply constraints.

“It’s supply,” he said. “That’s what we’ll be getting in the initial stages. Hopefully it loosens up a little bit, but the business plan from now to the end of next year, that’s what our business plan is for now, 650 per month.”

KMAu hopes the Seltos will help grow its sales in 2020 – albeit only slightly, from a predicted 61,500 sales this year to 63,000 – however the brand believes it could extract greater volume out of its small SUV with an unfettered level of supply.

When speaking with GoAuto, Mr Meredith said the brand would be able to significantly increase its volume without a supply restriction.

“I think we could probably do between 1000 to 1200 (per month) with a free supply,” he said.

The latter would give the Seltos an annual sales total of 14,400 units, which based on 2018 results, would place it third in the entire segment behind the Mitsubishi ASX (19,034) and Mazda CX-3 (16,293) but ahead of the Nissan Qashqai (13,950).

A tally of 14,400 sales would also place the Seltos second in the brand’s overall portfolio behind the Cerato small car (18,620 units in 2018), with the potential of nabbing top spot in coming years as the trend away from passenger cars and towards SUVs continues.

Mr Meredith said that he hopes supply constrictions coming out of the Gwangju factory in South Korea can ease towards the end next year, opening up greater opportunities for increased sales volume and a continued period of growth for the brand in the face of a contracting market.

He added that the brand is constantly pushing for greater supply but will have to settle for its current stock levels.

“We’re always asking for more supply, but the car’s going incredibly well in the domestic market. It launched two months ago,” Mr Meredith said. “We’ve just got to be happy with that 650 (per month).”

He added that he was pleased with the level of interest in the Seltos leading up to its on-sale date of October 25.

“We log inquiry for it from our website, and it’s basically doubled what the initial interest was in Stinger, so it’s quite a few thousand inquiries on the car,” Mr Meredith said.

“Different segment, obviously a bigger segment, but we’ve been really happy with the pre-launch inquiry.”

The Seltos will be offered with four model grades and driveaway pricing, starting with the S at $25,990 and topping out at $41,990 for the GT-Line.