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Kia heads upmarket with Optima

Classy: Kia's new Optima signals an upmarket push for the brand.

Luxurious new Optima a key part of Kia’s plan to grow sales and profit in 2011

24 Jan 2011

KIA’S classy new Optima has emerged as a key plank in the fast-growing Korean brand’s drive upmarket, even if it plays only a minor role in reaching its target of selling 30,000 vehicles this year.

Launched at the Kia-sponsored Australian Open tennis tournament over the weekend, the all-new medium sedan marks a significant departure from the car-maker’s traditional bargain-basement pricing while ramping up its value equation even further.

Now available in just one highly specified 2.4-litre ‘Platinum’ variant priced many thousands of dollars lower than its most direct rivals at $36,990, the new Optima will be limited to just 1000 local sales due to strong overseas demand, making it a minor player in a growing market segment led by Toyota’s fleet-friendly Camry.

However, each of those sales should be incremental over Kia’s record tally of 23,848 sales in 2010 given that the Optima’s forebear, the unloved Magentis, was discontinued in Australia before last year.

Last year’s sales represented a 22.9 per cent increase on 2009 numbers, meaning Kia’s Australian sales growth was more than double that of the total new-car industry.

Kia Motors Australia chief operating officer Tony Barlow said the TF-series Optima sedan will combine with the new Cerato hatch and Sportage compact SUV, the relatively new Sorento medium SUV and the redesigned Rio light-car due here later this year to drive the brand’s Australian sales towards 30,000 in 2011.

“We’re looking for similar growth over 2010 this year, but once again we’ll have to work pretty hard to get supply,” Mr Barlow told GoAuto.

“We’re locked in to a number which is slightly higher than 2010 at the moment, but as we work through the year we’ll try and move it up towards the 30 (thousand) mark.

“We’re now back in the hatch part of the small car segment, which is the largest segment in the market. Up until now we’ve only had a small sedan, and 50 per cent of small car sales are hatches, so we’re very confident with Cerato.”

While Kia, which sold more than two million vehicles globally for the first time in 2010, was Australia’s number 12 vehicle brand last year with almost 24,000 sales, 30,000 sales would have seen it leapfrog Suzuki to place 11th behind Volkswagen.

Hybrid, turbo, diesel, 2.0-litre and wagon derivatives of the Optima have been ruled out for Australia this year.

Although Optima production commences in the US from September, the 2.4-litre model’s launch in Europe in April is expected see tight global supplies of the car from Korea.

17 center imageFrom top: Next generation Kia Rio sketch, Kia Cerato and Kia Sportage.

As with top-shelf Platinum versions of the Sorento and Sportage crossovers, local demand for which has exceeded Kia’s forecasts by more than 20 per cent, Australian customers could face delivery delays of up to five months.

“It (Optima sales) will all be additional, but we’re going to be tight on production,” said Mr Barlow. “We’re rattling the can with our colleagues up in Korea, and the dealer network has only just learned about the value proposition.

“We have to be honest with customers about how long they may have to wait. We have people waiting three, four and even five months for some Sorento and Sportage models and I’d imagine the Optima will be the same.

“It’s not in our plan to have another Optima variant this year. I think our first opportunity for another variant will be when the year model change occurs next year.

“We decided to go with the Platinum because this is a car that can’t wait for the market. We’re putting one specification out there that we believe is a great value proposition,” said Mr Barlow.

Tight global demand will prevent KMAu experiencing the same success with the Optima as it has achieved in Korea, where the K5, as the Optima is known in its home market, was the top-selling D-segment car for the first time ever in June and July.

Senior executives say that, based on its level of dealer enquiry, it could sell more than 5000 examples of the Optima Platinum with no supply restriction.

Volume aside, KMAu believes the Optima Platinum will be a game-changer for the Kia brand in Australia.

“Perception can be a far more powerful motivator than reality,” said Mr Barlow.

“What is perceived, be it fact or fantasy, can sometimes become etched in stone. In the case of Kia, the perception lingered for years of the cheap and cheerful car company – cheap in the worst sense of the word … cars bought only on price and probably only when you had no other affordable option.

“While there may have been some truth in this perception years ago, time and actualities have moved on. Kia in recent years has moved on quickly with advances in design, engineering, quality, performance and a relentless R&D program that have all combined to create a new reality.

“Over the past couple of years, these advances and our brand-building activities have led more and more people to have a different understanding of Kia. When the award-winning Sorento and Sportage were launched recently, these were the reality checks.

“Kia’s transformation prevailed in tangible forms with models that suited Australian drivers’ discerning tastes and were also tuned for their driving pleasure. People en masse could see what Kia had become. With new Optima, the vision becomes even clearer.

“2010 was a good year for Kia … and we’ve set the bar even higher in 2011. Kia is now well down the path of a journey that will see our brand strengthen with new models, designs and a greater determination to deliver excellence to our customers.

“The Optima is the next step for us on that journey. With the Optima, Kia is giving Australian buyers not only an outstanding vehicle, but the opportunity to experience prestige motoring at unrivalled value.

“Another step on the journey will arrive later this year with the all-new replacement for the ever-popular Rio … and I assure you there’s even more exciting steps on the journey as we complete the rejuvenation of our model line-up and more.

“What Kia has now as a company is a confidence and attitude that challenges can be met and overcome and that we have the model line-up, integrity and support to take on the challenge and move forward.

“Optima, as an addition to our line-up, allows us to take that next step forward.”

KMAu national marketing manager Steve Watt said the Optima will be promoted with the catch-cry “Made you look” to highlight its arrival as the latest in a procession of bold new vehicle designs from Kia, including the Soul, Sorento and Sportage.

“Kia’s bold designs clearly differentiate us from our competitors,” said Mr Watt. “They give us a chance to attract an all-new customer – people who previously wouldn’t have given Kia a serious look.

“In the automotive business, it’s a rare opportunity to start with a white sheet of paper, to create a brand identity driven by design. Our global design team have fully exploited this brief, creating a dynamic identity without having to deal with the heritage of an older brand.

“The all-new Optima embodies this dynamism and will push Kia to an all-new level. It will reinforce our credentials as a design-driven brand – a brand that will be considered for its head-turning looks, and then purchased because it’s an intelligent choice.

“The all-new Optima will change the way motorists look at Kia.”

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