News - Kia
Kia to rethink Soul, Sorento prices
Sorento and Soul could get a lift from sharp driveaway pricing, says Kia Aus boss
8 Jun 2016
KIA Motors Australia (KMAu) is set to reprice its boxy Soul crossover and Sorento large SUV in a bid to improve their sales performance in the local market.
Having previously admitted to GoAuto that the brand is unhappy with current sales of each model, KMAu chief operating officer Damien Meredith has revealed ways that the company is looking to address the two models' lack of popularity based around revised pricing and marketing strategies.
“We’re looking at how we’re going to reposition Soul right now,” Mr Meredith confirmed to GoAuto at a media event in Sydney this week.
Asked whether the Soul, which is currently priced from $26,990 plus on-road costs, could be repositioned below the $20,000 mark, Mr Meredith indicated the company would not dip that low but said there would be a price reduction.
“I’m not quite sure $19,990 but somewhere in between (that and current pricing) is what we’d be looking at. It’s probably a matter for us to get the strategy in place to get what (the factory volume) we asked for. We’re working hard on it.”
To the end of May 2016, KMAu has sold 33 Souls, a reduction of 59.3 per cent year to date and representative of less than 0.1 per cent of the sub-$40,000 small passenger-car segment as categorised by industry body VFACTS.
Mr Meredith conceded that small boxy wagons such as the Soul are unpopular in Australia.
“You’ve got to be very aware that if you think of that shape in Australia … I can’t think of one successful one (model),” he said, although he maintained the Soul would not follow the Pro_cee’d GT and Cerato Koup, and competitors such as the Toyota Rukus, and exit the market.
KMAu has driveaway pricing strategies in place for its Picanto micro hatchback, Rio light hatchback and Cerato small hatchback and sedan, with each entry model equipped with an automatic transmission for less than $20,000 on road.
However Mr Meredith conceded an aggressive driveaway strategy was not currently extended to either the Soul or the Sorento large SUV.
The entry Sorento is priced from $40,990 plus on-road costs, and according toMr Meredith, “you’re looking at $44,000-$45,000 driveaway” when more popular competitors are offering sub-$40,000 deals.
“(So) do we bring in an entry driveaway point with Sorento?” Mr Meredith pondered.
“You could look at doing something from a retail point of view and getting the base model down to $39,990 driveaway, that’s an option to garner a bit of interest.”
He further confirmed that KMAu, “Would look at that from July 1 as one of the options.”“I don’t think we can be happy with 350 sales per month. We could say that 350 Sorento sales is okay, but the reality is you look at the size of the segment and what some of its direct competitors are doing, and we’ve got to do something.”
To the end of May 2016 Kia has recorded 1593 Sorento sales for a 3.4 per cent share of the sub-$70,000 large-SUV segment. South Korean rival, Hyundai's Santa Fe, has almost doubled the Kia’s volume with 3095 sales and a 6.6 per cent share in the same period.
“I’m a great believer we need to finish in the top five of every segment we compete in,” Mr Meredith continued.
“We’re a little bit off pace with Rio, which was seventh last month (May), Cerato was fifth last month which is great, Sportage was seventh I think (but) you get to Sorento and it’s 13th or 14th.
“For its ability to win awards, we should be selling a lot more … but we’ve got a bit of work to do on Sorento.”
The silver lining is that 60 per cent of Sorento buyers are choosing the flagship $55,990 Platinum version.
“People who buy the Platinum just see a great car, with great value, and they see everything in it, it’s as simple as that,” Mr Meredith said.
“What my conundrum with that is, there’s not enough of those people. So we’ve got to work really hard.”
In the passenger-car segment the new Kia Optima, which has been on-sale locally for six months, was, like the Sorento, an example of the brand selling to more buyers with higher pricing, Mr Meredith said.
“We struggled to do triple figures (in sales) with the old Optima, but the new Optima is doing between 130 and 150 (sales) per month so we’re really happy about that car.
“We think we can do a bit more, but we’re happy with that car, we believe we could get to the 200 (sales) we said we were with a bit more marketing push. I’m really happy with our private sales but our fleet list could grow a bit.”
The previous Optima was priced from $30,990 however the new model launched in November 2015 starts from $34,990 and – as with Soul and Sorento – does not yet feature a factory-backed driveaway campaign offer.
Mr Meredith added that any driveaway campaign for Sorento or other Kia models “would be tight, but as always the dealer network are pretty good and they share the wear in that regard with profit margins.”
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