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Kia finally set to give Picanto green light

Small mercies: Kia's Picanto is expected to come to Australia in one five-door specification, complete with automatic transmission as standard.

Smallest Kia to do the hard yards in Australian's tough micro car market


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14 Jul 2015

KIA Motors Australia (KMAu) is preparing to swim against the tide when it belatedly launches the Korean company’s smallest model, the Picanto city hatchback, into Australia’s shrinking micro-car segment late this year or early 2016.

The company’s chief operating officer Damien Meredith today said Kia expected to confirm the Picanto for this market as early as next week, thus finally adding the little five-seat hatchback to the local line-up more than three years after the second generation was launched in several overseas markets, including Europe.

The business case for Picanto is being put to the Kia powers-that-be in Seoul this week, with every expectation it will get the tick of approval for immediate action.

The South Korean-built Picanto will be imported in a single five-door specification for about $14,990 driveaway to compete with the likes of Mitsubishi’s segment-leading Mirage, Holden Barina Spark, Nissan Micra and Suzuki Celerio.

But it will not be an easy task, with sales in the Australian micro segment down 31 per cent this year, due partly to the appeal of one-sized-bigger light hatchbacks that are being routinely discounted and offered with cheap finance.

In the first six months of this year, the micro segment commanded just one per cent of the Australian new-vehicle market, collectively garnering just 5886 sales. Of those, one in three sales was taken by the Mitsubishi Mirage, despite a whopping 50 per cent decline in Mirage sales.

Mr Meredith told journalists that although the micro segment was struggling, KMAu would have an advantage – the best car in the class.

He said the Picanto for Australia would have an all-in-one specification, complete with a four-cylinder engine and automatic transmission as standard equipment.

KMAu has set a sales target of 3000 Picantos a year – a figure that, on current rates, would likely place it second in class behind Mirage.

The marketing pitch will take a leaf out of Kia USA’s book, promoting Picanto to parents of young drivers, especially university students, as a new-car alternative to a second-hand first car. Kia has successfully used this tactic in North America for cars such as Soul.

The Picanto will play a key role in Mr Meredith’s goal of achieving annual sales of 50,000 units and a 5.0 per cent market share by 2019. Based on first-half sales of 16,660 units this year, Kia should round out the year with about 33,000 sales with a share of about 3.0 per cent.

Presuming Picanto arrives as planned, Australia will get the facelifted version that was launched at this year’s Geneva motor show. Changes included fresh nose and tail treatments, new-look 14-inch alloy wheels, bigger brakes and a revised interior trim.

KMAu had the option of waiting until the third-generation Picanto arrived in about a year, but Mr Meredith said his preference was to strike immediately with the current version.

Although the Picanto is available elsewhere in three- and five-door hatchback guises and with a choice of 1.0-litre three-cylinder and 1.25-litre four-cylinder engines with manual or automatic transmissions, KMAu will only take the five-door with the larger 1.25-litre powertrain with an auto transmission.

It is unclear if that transmission will be the current four-speeder or the planned six-speeder that is said to be in the pipeline. According to KMAu, Australia will take the best transmission available.

The 1.25-litre engine puts out 63kW of power and 120Nm of torque, giving Picanto a slight performance edge on main rivals such as the Mirage (57kW/100Nm), Barina Spark (63kW/113Nm), Micra (56kW/105Nm) and Celerio (50kW/90Nm).

Full pricing and specifications will be announced closer to launch, but expect it to land on top of rivals at $14,990.

The Picanto will sit below the Kia Rio that starts at $15,990 (plus on-road costs) for the three-door and $16,990 for the five-door.

Like most Kia models, the Picanto was penned at Kia’s European design centre by a team headed by chief design officer Peter Schreyer, who is now one of three Kia presidents.

Mechanically, Picanto shares under-the-skin components with parent company Hyundai’s i10 that is unavailable in Australia. Like Kia, Hyundai has been dancing around plans to import the i10, most likely from Turkey – where the European version is built – rather than India.

However, the i10 business case is yet to be made.

Sitting on a 2395mm wheelbase, the Picanto is 3595mm long and 1595mm wide, making it 450mm shorter and 125mm narrower than the Rio. That also makes it 115mm shorter and 70mm narrower than the Mirage.

So far this year, Kia sales in Australia are up 8.9 per cent, thanks mainly to the top-selling Cerato’s contribution of 5528 units (+60 per cent), Carnival people-mover (1463, +47.8%) and Sorento SUV (1629, +21.7%).

All new Kias are covered by Kia’s industry-leading seven-year/150,000km warranty.

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