News - Kia
Sub-$20k push won’t hurt us: Kia
Strong start: Kia’s current Picanto has been a sales success for the brand in Australia since its launch in April last year.
Kia says plans to dominate sub-$20,000 passenger segment will not impact brand
10 March 2017
KIA Motors Australia’s (KMAu) push to become one of the top players in the
sub-$20,000 passenger car segment does not contradict the company’s desire to
ditch its cheap and cheerful image, according to Chief operating officer Damien
As previously reported by GoAuto, Kia offers three models from below $20,000
driveaway in Australia, including the $14,990 Picanto micro car, the $16,990
Rio light hatch and the $19,990 Cerato small car.
KMAu has previously signalled its intention to be one of the market leaders in
these passenger segments, but Mr Meredith rejected the suggestion that the
strategy would not help the company shake off its cheap and cheerful
“No not at all because if you study what we have done as an organisation over
the last three years, you will see that the 50 per cent of volume is driveaway
and 50 per cent is not,” he told Australian journalists at the Geneva motor
“Look at what we do with Sportage, Carnival, Optima and obviously Sorento (no
driveaway pricing). So we are very careful to manage that. Last month SUVs
outsold passenger cars for first time ever. But there is still a couple of
hundred thousand cars in there (passenger). So if you are in a strong position,
and you are getting more market share as the years go on, that gives you good
Mr Meredith said that Kia’s volume in Australia was not predominantly made up
of sub-$20,000 passenger cars, with the company’s other more expensive models
helping to grow sales.
“It is very important to understand that our volume doesn’t just come out of
Rio, Picanto and Cerato, we get a lot of volume out of Sportage – 1200 cars
last month. Sorento and Carnival are creeping up to that 800 a month
collectively. There is a bit of work to do with Optima and we know that.
“All in all, our strategy is pretty robust and it has worked pretty well for us
so far over the last couple of years. Saying that, you can’t rest on your
laurels, you have got to be respectful of your competition. The market can
change very, very quickly and fortunes can change very, very quickly,” he said.
In 2016 sales, Kia’s Picanto ran second in the micro-car segment with 1934
units, trailing Mitsubishi’s Mirage (3064), while in the light segment, the Rio
(6054) was seventh behind the Hyundai Accent, Mazda2 and Toyota Yaris.
The Cerato had its best sales year to date last year with 13,111 units, but it
was behind the top selling Toyota Corolla (40,330), Mazda3 (36,107) and Hyundai
Overall, Kia had a record year in 2016, with 42,668 sales, representing a 26.5
per cent increase compared to 2015.
Mr Meredith quantified the split between retained customers and those that were
new to the Kia brand.
“We run at about just over 60 per cent buyer loyalty so if Mrs Jones bought a
Rio five years ago, she has probably bought another Rio. We are relatively high
but that’s pretty good.
“Obviously our pie has grown a lot over the last few years. Not only because of
people who are being loyal, it is because of new people coming to the brand.
“Picanto is important to get people into the brand at a price point then maybe
their next car is Cerato, then next car is Sportage then maybe Sorento. That’s
the way you have got to look at it. If you get a person in their driving cycle,
they get four or five cars from the same brand – you’ve done your job.”
Mr Meredith said that while the seven-year warranty was a key driver behind the
company’s recent growth, there were a number of other factors relating to
customer care that have also had an impact.
“We have changed the dealer network significantly. We are a lot better now than
what we were in regards to how we address customer concerns. We were always
pretty good at it, but I think now we are very good.
“For example, if a complaint comes through Kevin’s (KMAu general manager media
and corporate communications Kevin Hepworth) department, we are onto it
straight away. If it comes through normal channels, we are onto it straight
“I get a listing of critical cases on a daily basis and the way we are
structured, I can just talk to Kevin or (national service manager) Phil Murray
and sit down and say what should we do, but an answer is given very quickly.
“That helps build respect within the customer base and our customer
satisfaction is quite high.
“It’s a challenge for us. The other thing is you can’t work in a bubble. You
have got to respect the competition. And you know that they are trying as hard
as you so you just have to be better at what you do and how you deliver. That’s
what KMAu does relatively well at this point in time.''