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Kias to come: Picanto (above) could be sold here by 2007, while Magentis (below) replaces Optima in July.

Factory backing gives Kia renewed vigour in its quest for more Australian sales

Kia logo13 Mar 2006

DESPITE a softening market this year and increasing market segmentation, the new factory-backed operation of Kia Motors Australia (KMA) has ambitious plans to double sales to 50,000 units annually by 2010.

This year it aims to lift sales to 30,000, up almost 5000 over 2005. Last year Kia, under Ateco Automotive, sold 25,293 cars to achieve a 2.6 per cent market share.

Operational since March 1, the new company aims to achieve growth through new model variants and the possible addition of the Picanto light car and next-generation Carens people-mover.

It wants to offer more than one variant of each of its models, including the addition of "safety packs" of curtain airbags and ABS brakes, as well as the possible addition of diesel 4WDs and a two-wheel drive Sportage.

KMA general manager of marketing Bill Gillespie said he was aiming for two, and possibly three model variants, and that a 1.4-litre engine may be added to the Rio line-up.

"You may see that the current Rio may move up and another come in under it," he said. "You just can’t compete in the Australian market with just one grade."Mr Gillespie also said that future Kias, including the Sorento, would have a strong Australian input for suspension tuning. The current Sorento uses a softer North American tune.

He said the Picanto also presented opportunity for the company for a low-cost entrant. The 1.1-litre light hatch develops 48kW at 5500rpm and 97Nm at 2800rpm and has been acclaimed as one of the most fuel-efficient petrol cars in Europe, achieving a 4.9L/100km combined fuel cycle.

KMA’s chief operating officer Steve Lotter, a veteran of 30 years’ automotive experience (mostly with Toyota), said Kia’s cheap-and-cheerful days were over but the company would maintain its value position.

He said there would also be greater differentiation between Hyundai and Kia products over the next few years as Kia moved to create its own identity.

"The reality now is that the Korean product, in a quality sense, is as good as anything on the market," he said. "I think what’s really been lagging isn’t the reality, the perception has been lagging the reality.

"I think with the Kia brand we’ve got to ensure that the perception catches up with the reality."Mr Lotter said the car-maker’s brand identity was to build "exciting and enabling" products. "We must get Kia on to more people’s shopping lists," he said.

 center imageKia vehicles currently share vehicle hardware and design elements with parent Hyundai but Kia’s future design, as outlined by the C’eed concept car at Geneva, pointed to a new direction, according to Mr Lotter.

However, there are no plans to share back-room logistics, warehousing and systems locally between the pair, he said.

A breakdown of Kia’s sales forecast maintains that the Rio and Cerato will remain the volume players this year, selling an anticipated 8000 each.

In July, the Magentis four-cylinder and V6 large sedan will replace the Optima.

As its key rivals are the Hyundai Sonata, Mitsubishi 380 and Toyota Camry, Kia has set a conservative sales target for 2006 of 1000 vehicles, including the runout Optima.

The Carnival short-wheelbase model joins the Grand Carnival in June, with a sales forecast of 5000 a year. The company expects to maintain the Carnival short-wheelbase’s $29,990 price point.

The Sportage, which has been affected by supply shortages, is expected to hit its straps this year with a forecast of 3600. More model variants are expected with 2WD and diesel engine offerings.

The Sorento will remain under $35,000 but from August gains a facelift that includes a new interior. A diesel powerplant is also being considered.

The 2.5-litre 16-valve CRDi develops 104kW at 3800rpm and 320Nm from 2000rpm.

With the departure of the Pregio, the company’s K2700 light truck remains its sole commercial vehicle.

If KMA achieves its 50,000 target by 2010 this will deliver five per cent of the total market and give the importer "the mass to be a critical player", according to Mr Lotter. Ateco has been instrumental in growing volumes for the brand since it took over from Itochu in 2000, when Kia sold 9000 vehicles.

* KIA’S expanded production of its Sportage 4WD wagon in Korea has forced the axing of the Pregio van, one of the company’s best sellers in Australia.

However, one of the first points of business for Kia Motors Australia’s chief operating officer Steve Lotter is to find a replacement.

"We obviously have to plug that hole," he said. A new van has not been ruled out in the long-term.

What's coming from Kia:

Carnival SWB - June
Magentis large car - July
Cerato facelift - October
Sorento facelift - October
Rio hatch 1.4 - December
Sportage 2WD - December
Carens people-mover - 2007
Picanto light hatch - 2007

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