Kia unblocks supply pipeline

KIA says it has solved the dire stock supply problems that choked sales of its new-generation Sportage compact SUV and Optima mid-sized sedan last year, with supplies now more freely available across Australia.

Australian customers had to wait up to five months for Optima and up to 10 weeks for the diesel Sportage as Kia’s South Korean factories battled to handle the global demand that made Kia one of the fast-growing world brands of 2011.

Kia Motors Australia sales manager Alan Crouch said both models were now coming down the supply pipeline in more plentiful numbers, with two to three weeks’ supply of Optima available.

“We should be able to handle that a whole lot better than last year,” he said.

While Kia averaged just 70 Optima sales a month locally in 2011, the company lifted that to 112 in January, and says its supply rate will double this year compared with 2011, indicating that it might achieve 1600 Optima sales this year.

The 2.4-litre Optima – launched in January last year to replace the Magentis – was available in only one top-shelf $36,990 Platinum specification for most of last year, but as supplies freed up an entry-level $30,490 Si was introduced in late December.

Left: Kia Sportage. Below: Kia Rio three-door and Sorento SUV.

Sportage sales dropped to as low as 172 units in January last year, but recovered to 372 in December, while January’s 321 Sportage sales represented an 82.4 per cent improvement on the same month last year.

The shortages of 2011 tested the patience of Kia customers, just as the brand was finding showroom traction due to new-found style – thanks to former Audi designer Peter Schreyer – and substance – thanks to a multitude of mechanical improvements such as new platforms and direct-injected Gamma engines from parent company Hyundai, as well as locally refined suspension settings.

Despite the shortages, Kia Australia managed 5.4 per cent sales growth last year, mainly on the back of a 73 per cent jump for the Cerato small car, along with a 24.5 per cent lift in volumes of the ageing Sorento SUV.

However, a 31.7 per cent dive in sales of the Rio light car in its run-out year – when dealers basically ran out of stock – cost the importer almost 3000 units and any chance of major growth.

In 2012, however, Kia will have a full complement of new Rio models – in five-door and three-door hatch back, as well as sedan – and is looking forward to a full year of unfettered Optima and Sportage.

With a number of high-profile awards drawing attention to the Rio, Optima and Sportage, the company finds itself in the luxurious position of having buyers seeking out the brand, with 80 per cent conquest business.

Further showroom activity is expected to be driven by a new Sorento due in the third quarter.

The upshot of this new-model momentum is a target of double-digit sales growth in Australia in 2012, with Kia setting itself the goal of finishing the year as Australia’s fastest-growing mainstream brand.

The company has started on the right track, with 2276 sales in January – up 24.4 per cent on January 2011 – scoring Kia a spot among the top 10 sales performers for the month.

However, the company has indicated that Rio sales might not immediately race back to 2010 sales levels – when more than 9000 Rios found homes in Australia – with a sales prediction of “upwards of 7000 to 8000” units this year.

Mr Crouch said at last week’s Rio three-door and sedan launch that the company had sufficient supplies to achieve its sales plan this year, adding that it had good support from the factory.

“We are hoping we will be able to score more cars over the year, and we keep on asking for that,” he said.

Kia had no sooner launched the new Rio three-door hatch last week in $15,290 entry-level S guise and flagship $19,990 SLS (auto $2000 extra) when it announced discounted driveaway pricing for the S in both three- and five-door Rio models.

Until the end of March, the Rio three-door S manual will be sold for $15,990 driveaway and the five-door S manual for $16,990 – just $700 above list price in both cases.

The four-speed automatic models still cost $2000 extra.