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Kia targeting 48k sales in 2017

Fired up: The Sportage (left) has been a sales winner for Kia in Australia but the larger Sorento could be doing better according to the company’s local COO Damien Meredith.

New product and increased interest in existing models to lift Kia in 2017

28 Nov 2016

KIA Motors Australia (KMAu) has signalled a target of 48,000 sales Down Under next year, which would place it ahead of Subaru and ensure it becomes a long-term top-10 player in the new-car market.

The South Korean car-maker is on target to hit 42,000 sales this year, which represents a lift of about 27 per cent over its 2015 record year-end tally of 33,736 units.

Speaking with journalists at a media event last week, Kia Australia chief operating officer Damien Meredith said there were three key reasons for the sharp rise in Kia sales in the past two years.

“Great product, we changed our communications to focus on product (rather than price),” he said. “Without a doubt, the seven-year warranty gave consumers permission to look at our product. Those three major factors changed the dynamic of what people thought about our brand.”

Mr Meredith said the reasons people choose the Kia brand had recently shifted, with the seven-year warranty proving to be a major draw card.

“Research shows the major reason why people buy our product is because of the warranty. It used to be price. Price has slipped to third. Second is how our cars look. That might have something to do with showing our cars, not showing our price. That has changed dramatically and quickly over a three-year period of time.”

The 48,000-unit target for 2017 would push Kia further into the top 10 best-selling makes in Australia – a feat it is on track to accomplish for the first time this year if it can hold off a final push from Honda and Mercedes-Benz.

Kia has previously confirmed a target of 50,000 units per year by 2020 as it seeks to shrink the sales gap to its sister company Hyundai, which was 70:30 in favour of Hyundai, to 60:40.

Mr Meredith said the continued sales growth in 2017 would be a result of a “potpourri” of things including more new product, increased sales of existing models and the ongoing attraction of the industry-leading warranty.

“Certainly the new Rio and new Picanto are going to help dramatically. We believe there is still upside on Cerato,” he said. “When you look at what’s happening between the passenger market and the SUV market, if we can ride the wave with Sportage and Sorento, there will be upside on that too.

“We think the volume increase will come from all of those areas. We are relatively confident we can do about 48,000 next year.”

Kia’s new-model activity will be relatively quiet next year, with the all-new Rio light car set to make its local debut at the Australian Open tennis championship in January, while the second-generation Picanto will arrive in April, just one year after the ageing first-gen version launched in Australia.

 center imageLeft: Kia Australia chief operating officer Damien Meredith.KMAu management had previously set a target of having all of its core models in the top five best-sellers within their respective segments and the car-maker has just achieved that with the Cerato.

With 11,012 sales year to date – a 33.4 per cent jump over the same period last year – the Cerato is the fifth best seller in the ultra-competitive sub-$40,000 small car segment, behind the Toyota Corolla, Hyundai i30, Mazda3 and Volkswagen Golf.

Mr Meredith said the company was also pleased with the response to the new-gen Sportage mid-size SUV that launched early this year, adding that Kia had not needed to discount the model in an attempt to drum up interest.

“What we have been so ecstatic about is that … we haven’t gone driveaway with that car and I think that is the big difference … if you look at our business model from a few years ago, Sorento would have been on driveaway already, Carnival would have been on driveaway already.

“Those cars have been on the market now for nearly two years, or over 18 months. They are not driveaway. They are just normal pricing and those cars are still doing very well in the marketplace. When you talk about brand and what is changing, that is what’s helping to change it. It is not price that is driving the measurement of sales, it is the product itself.”

Mr Meredith has previously expressed a desire for an increase in sales of the Sorento large SUV, which trails its key rivals despite positive media reviews.

It has experienced some sales growth in recent months and is up 29.4 per cent to 3469 units so far this year, but Mr Meredith is hoping for more.

“It has lifted, but it hasn’t got to where it needs to be. It needs to be 400-plus month in, month out. It gets there sometimes. It has jumped probably 10 per cent. That’s the 350-370 mark.”

Mr Meredith said it was gratifying that so many elements were now coming together to ensure sales growth and increased brand awareness.

“I think we have made good product for a long time. But the consumers believe it now, the dealer network believes it, (the media) believe it. We still have a long way to go in a hell of a lot of areas. But from where we were to where we are, it has changed quite dramatically and quickly.”

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