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Kia expects sales boom to continue

Baby face: Kia Motors Australia is preparing to launch the Stonic light crossover in the fourth quarter of this year, slotting in between the slightly larger Seltos small SUV and the Cerato small hatch.

Stonic crossover confirmed, next Sorento near, as Kia targets 65,000 sales this year

28 Jan 2020

KIA Motors Australia (KMAu) chief operating officer Damien Meredith is targeting ongoing growth for the South Korean brand this year of four to five per cent, taking its annual sales up to around 65,000 units as all-new models including the Stonic baby crossover bolster its range.

 

In a media briefing in Melbourne last weekend, Mr Meredith told GoAuto that the company was looking to displace Ford and secure a top-five position among the leading motor companies in Australia, with Kia’s continuing underlying strength to come from a full year of trading with the recently released Seltos small SUV and the new fourth-generation Sorento large SUV that will launch in about six months’ time with diesel power, and towards the end of the year with petrol.

 

Mr Meredith said he anticipated its ever-strengthening SUV line-up to compensate for some softening of its total passenger car sales, particularly as stocks of Optima run down and the mid-size sedan is not replaced, but the top-selling Cerato small car – which racked up 21,757 sales last year, up 16.8 per cent on 2018 and accounting for 35 per cent of the brand’s total volume (61,503) – is expected to hold firm.

 

Kia’s planned electric vehicle rollout, which was originally intended to kick off with the e-Niro and Soul EV at this month’s Australian Open tennis tournament before production for overseas markets scuppered the local plan, might also still take place later this year (supply permitting), although Mr Meredith said 2021 was shaping up as the year KMAu enters the EV marketplace with these two models and possibly more.

 

He is particularly keen on suggestions that the Picanto city car might become an all-electric model – “we’d look very, very favourably at that” – while the first of an all-new dedicated EV model family, which is part of the ‘Plan S’ global strategy announced earlier this month, is also due for international release next year.

 

Mr Meredith would not comment on Kia’s crucial forthcoming mid-size pick-up, but this model line – to cover a full range of body styles, powertrains and drivelines – remains the lynchpin to the company’s long-held goal to reach 100,000 annual sales by about mid-decade, which could see it become a top-three brand in Australia behind the all-conquering Toyota and alongside Mazda and affiliate brand Hyundai.

 

A large off-roader based on the same ladder-frame chassis is expected to emerge around the same time as the ute, while Mr Meredith confirmed that he is also working on the case to bring other larger SUVs to market.

 

The monocoque-chassis American-built Telluride large SUV had been ruled out as a left-hand-drive-only proposition, but Hyundai Motor Co Australia’s success in securing the related Palisade for launch here has prompted KMAu to review the business case.

 

Coupe-style SUVs, as demonstrated by a variety of concepts, look to be similarly in the mix.

 

Mr Meredith said a broader attack on the light-commercial vehicle market in conjunction with the pick-up was on the agenda, too, which could herald a van range and a return to light/medium trucks.

 

The comprehensive model rollout lends weight to KMAu’s lofty ambitions, but Mr Meredith said Kia’s ongoing development as a more sophisticated brand, backed by a reassuring seven-year/unlimited-kilometre warranty, was the basis for its success where others were going backwards in the current market.

 

“Over the past 10 years, I think we’ve had pretty good product, it’s just that people had a ‘cheap and cheerful’ mentality about it – and we’ve been able to change that,” he said.

 

“I think the seven-year warranty has given people permission to look at our brand, I really do. That’s helped us dramatically, and I think that we’ve also been consistent with our programming, etc, which has worked well.

 

“And we couldn’t have doubled our volume in five years without great product, that’s the catalyst.”

 

There is a large gulf between 65,000 sales that should see Kia crack fifth position this year and the 85,000-plus units KMAu needs to overtake Mitsubishi and threaten Hyundai and Mitsubishi for a podium position.

 

But Mr Meredith is optimistic that the company can achieve its goals, capitalising as rival brands falter in the increasingly difficult market. 

 

“I think with our product plan and our brand improvement, I think we can get to 100,000 cars if and when we get a light-commercial range by 2025, 2026,” he said.

 

In terms of this year’s forecast, Mr Meredith said: “We think we can probably grow between four and five per cent this year because we’ll have, obviously, a full year of Seltos, so our product is going to help us there significantly.

 

“We believe that we’ll hold on to our small passenger car volumes reasonably well, there will probably be a little bit of a dip with those three (Picanto, Rio, Cerato), but we’re pretty confident that we can go close to 64,000 to 65,000 sales this year.”

 

Kia was recently among the automotive brands to be affected by an infestation of stinkbugs on car shipping carriers that delayed deliveries to Australia and may impact its sales performance early this year, but Mr Meredith said the supply issues were being corrected quickly.

 

He also emphasised that “we are a no-excuse organisation” and does not see the setback, and other issues such as the factory supply and exchange rates, as impeding the company’s upward trajectory.

 

“Things always get thrown in, such as exchange rate, and supply, and this and that, but the best way to do it is just get on with what you’ve got, with the resources and the inventory that you’ve got, and work out the best way to get the result that’s required,” he said.

 

“As you know in this business, we have to get monthly results, quarterly results, yearly results. It’s no good crawling up in a corner and saying, ‘You know, we’ve got 3000 cars that are floating between Singapore and Australia because the shipment had to be fogged.’

 

“You’ve just got to get on with it, utilise the dealer stock and move the cars around (the network) to keep the customers happy.”


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