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Kia aims for 60,000-plus sales in 2019

Record breaker: The SP concept is the precursor to Kia Motors Australia’s first production small SUV that will likely enable its sales success to continue.

Small SUV due in October to add incremental volume as Kia eyes another record year

22 Jan 2019

AS MOST car companies in Australia are preparing for another tough year amid the cooling new-vehicle market, Kia is aiming to sell 60,000 passenger cars and SUVs for the first time, with the expected October launch of its yet-to-be-revealed compact crossover to add vital incremental volume.


Speaking to journalists last week at the Cerato hatch and Picanto GT national media launch in Victoria, Kia Motors Australia (KMAu) chief operating officer Damien Meredith said the company is hoping to break the 60,000-unit barrier in 2019, which would be its fifth consecutive annual sales record.


However, he cautioned that KMAu’s growth is projected to continue to slow this year, after its volume in 2018 increased by 7.5 per cent, to 58,815 vehicles.


“It gets tougher as the volume gets higher,” Mr Meredith said. “We still believe there is growth in the brand in Australia … (but) we don’t believe that growth will be as vibrant as that in 2019.”


The company’s sales rose by 28.3 per cent in 2017, 26.5 per cent in 2016 and 20.5 per cent in 2015.


As reported, the contracting housing market, bank credit squeeze, drought conditions, weak dollar, wage growth issue and upcoming federal election that were blamed on the market shrinking by 3.0 per cent last year – to 1.153 million vehicles – are expected to be limiting factors on the industry during 2019.


Nonetheless, after trailing a declining Holden (60,751 units, -32.7%) by just 1939 vehicles last year, seventh-placed Kia is expected to overtake the struggling lion brand and crack the top six by the end of the year if current trends continue.


Much of the South Korean brand’s growth will be driven by incremental volume from its first small SUV, which is due to enter production in September after KMAu rejected the European-market, Rio-based Stonic due to its lack of appropriate engines for the Australian market.


KMAu general manager of product planning Roland Rivero told GoAuto that the petrol-only small SUV will be based on the SP concept that was revealed at India’s AutoExpo motor show in February last year.


He added that the SP concept “is very close to final production”, with only minor changes made to its side mirrors and cabin trim in the transition from show car to finished product.


The still-to-be-named Korean-built production version remains under wraps, but KMAu is likely to use the global nameplate while examples built in India may use a unique moniker in that market.


Mr Meredith was frank with his assessment of KMAu’s current crop of SUVs, the mid-size Sportage and large-size Sorento, which ranked seventh and ninth respectively in their segments in 2018.


“There’s a bit of work to do in regard to our volume expectations in that area,” he said. “We’re relatively happy with how Sportage goes, (but) there is work to do with Sorento.


“It’s a tough segment, lots of competitors. But we’d like to see that grow as much as possible.”


The Sorento (4385 units, -7.2%) lost the most volume of any Kia model last year, while the Sportage (14,042, +4.4%) improved after a facelift in July.


Despite buyer preferences quickly shifting towards SUVs, Mr Meredith said passenger cars will still play a key role in KMAu’s model line-up moving forward.


“It’s very important to us that we remain strong in that area,” he said. “It’s still an area we believe we can grow our volume and our market share in.”


Until the small SUV arrives, the Cerato small car (18,620 units, -0.6%) remains the key to KMAu’s sales success as its best-selling model.


While the fourth-generation Cerato’s sedan body style launched in June, delays with production of its hatch counterpart meant Kia ran out of stock of the third-generation model, preventing its overall sales from growing.


However, with the Cerato line-up now bolstered by the release this month of its new GT flagship (in both sedan and hatch body style) and the broader hatch line-up, Mr Rivero said he personally hoped the small car could make a push towards 24,000 annual sales.


Conversely, the dominant Picanto micro car (5394 units, +62.3%) is expected to taper off, with Mr Meredith suggesting “we’ll probably do close to 5000 Picantos this year”. This month’s GT launch is likely to renew interest in the model.


Meanwhile, KMAu will continue to push the Stinger large car (1957 units, +288.3%) in the hope that it achieves 2400 sales in 2019, according to Mr Meredith.


“It’s done very, very well for what we expected,” he said. “We’re very pleased with the full 12 months we’ve had with Stinger. It’s done its job quite well.”


The Carnival people-mover (6610 units, +12.5%) and Rio light car (6595, -3.8%) were also significant contributors last year, with Mr Meredith indicating that the latter’s supply issues impacted its result.


However, the future remains uncertain for the Optima mid-size sedan (577 units, -20.6%), Soul small wagon (485, +50.2%) and Rondo people-mover (150, -33.6%) – all of which continued to contribute only low volumes in 2018.


The Soul could live on in new-generation EV form as part of KMAu’s plans to sell a range of electric vehicles in the near future, but it is yet to be locked in.


If the Soul EV does receive the green light, it will be preceded by the e-Niro small SUV that GoAuto understands has likely had its launch delayed until January next year.


It is understood the e-Niro is currently planned to be the focus of KMAu’s key marketing campaign that runs alongside its long-running sponsorship of the annual Australian Open tennis tournament.


The e-Niro’s delay is due to supply issues relating to demand in Europe brought on by the European Union’s Emissions Trading System that taxes companies, including car-makers, for their excessive average carbon dioxide emissions.


As a result, the supplier that provides the e-Niro and the mechanically related Hyundai Kona Electric with their battery packs is operating at maximum capacity.


As reported, KMAu is pushing to add light-commercial vehicles, including a mid-size ute, to its model line-up by 2022, although official plans are yet to be locked in.


According to Mr Meredith, such a range expansion will eventually enable KMAu to sell more than 100,000 vehicles in a calendar year.

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