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Kia: ‘We will recover’

Covering all bases: Sorent EXL (above) and Pro-Cee'd (below).

Kia Australia boss defends bullish sales targets, despite another slump

Kia logo23 Aug 2007


KIA Australia expects to turn around its flagging sales before the end of the year, despite a further sizeable slump in the first half of the year that has thrown its previously bullish projections out the window.

In January, the company’s general manager Bill Gillespie predicted that last year’s 17.9 per cent sales slide (from 25,293 vehicles to 20,770) would be reversed in 2007 and that sales would increase to 30,000 by the end of 2008.

However, rather than moving forward, Kia sales slid a further 7.9 per cent to the end of July – in a record market – and has slipped another place to 12th in the sales race behind Suzuki.

Mr Gillespie has defended his predictions, citing unexpected delays in getting to Australia three vital new volume-potential products – the diesel-engined Sorento finally released this month, plus the two-wheel drive and diesel versions of the Sportage, which will be launched next week.

He also said that Kia Motor Corporation (KMC, which now controls the Australian franchise) had failed to provide hoped-for price relief on the struggling Cerato small car, which has since dropped a further 33 per cent over last year.

Kia had additionally been hoping to get the Rondo compact people-mover by the end of the third quarter, but an engineering and homologation backlog has pushed that back to an expected November on-sale date for Australia.

 center imageLeft: Pro Cee'd.

Instead of the 25,000 target this year, Mr Gillespie said the company was now aiming to recover sufficiently to at least pass last year’s tally before the end of 2007.

“I still think we will recover in the next five months,” he told GoAuto. “We’ll recover the lost ground (and finish) above last year, I’m confident of that, but whether we get to 25,500, which was our original goal, that’s a pretty significant challenge.

“Those predictions were based on having those vehicles (diesel Sorento, 2WD Sportage and diesel Sportage) in the market before June and that was our goal. As it’s turned out, they were not in the market before June (and) now we are talking August/September, so we have lost four months.

“At the same time, we were forecasting that Sorento would be stronger than what it’s been and I think at that time we suggested to you that we would be appealing to KMC for some assistance on Cerato and that hasn’t been forthcoming, but we are still working with KMC to get a better price on that.”

The current Cerato was introduced in 2005 and will be facelifted “this time next year”.

In October, Kia will replace its K2700 light commercial vehicle with the K2900, which will have a steel factory body and an increased payload (from 1000kg up to 1440kg).

However, there are still no prospects of a replacement for the Pregio van, which cost thousands of sales for the Australian arm when it was axed more than a year ago.

Given the declining nature of the compact people-mover segment, Kia is still working out where it will pitch the Rondo, which was originally to have been priced at $24,000.

The company remains confident the vehicle can attract buyers, but is considering giving it more equipment and a slightly higher price. Mr Gillespie said it would definitely be fitted with electronic stability control.

Although the highly-regarded Cee’d, an all-new small car built specifically for Europe, is no closer to coming here, the good news for Kia Australia has been a 10.9 per cent increase this year in sales of Rio.

This has largely been the result of introducing a 1.4-litre Rio LX at $14,990 early this year. This new price-leader model has since accounted for 80 per cent of Rio sales.

Mr Gillespie said that the success of the Rio LX had led the company to put on hold plans to bring the Picanto baby car to Australia, though he continues to talk to KMC about pricing and availability.

“In Australia, ‘A’ class minis are not very popular,” he added.

A turbo-diesel version of the mid-size Magentis is still on Kia Australia’s agenda and an evaluation car is in Australia, but the expected second-half arrival appears to have slipped into 2008.

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