A rising UK car parc, on the back of new models such as Rio and brand builders like Sedona has forced Kia to take action in a bid to retain aftersales business within its dealer network.
Kia UK aftersales director Richard Bush said: “Kia is coming of age in terms of car sales. We are selling considerably more year-on-year and have fresh models.
“There are two key areas we need to consider for aftersales: the ability to satisfy customers on repairs and to build confidence in the Kia brand.”
He believes Kia has “two years at most” to establish customer confidence and loyalty in its dealers' aftersales, parts and body repair businesses before facing intense competition from independent repairers, fast-fits and non-original part suppliers.
“We are in a unique position in that we have an opportunity to retain aftersales and parts business because the non-original parts' suppliers have not yet bothered with us,” he said. “We are looking to competitively price our parts to ensure people choose us.”
Kia has strengthened its dealer network in recent years, but just 20 out of 90 have a bodyshop, although several companies are considering building one. The bodyshop quality standards programme will, therefore, need to encompass dealers and approved independents.
“We need to establish a bodyshop network and get them comfortable with the Kia product – independents are not sure about repairing Kias because they don't see many,” said Mr Bush.
“That comes down to showing them where parts are available and providing technical support on pricing and repair methods.”
Kia does not feature on leading computer-based estimating systems like Audatex and Thatcham TTS, though it is in talks with Thatcham Research Centre about developing repair times.
“One concern is that without parts knowledge, bodyshops will tend to repair panels rather than replace them,” said Mr Bush. “They are unable to cost out prices and replacement times because our vehicles are not on estimating systems.”
As a result, Kia and its dealers lose out on parts profits, although availability, at 95%, is excellent. The delivery service will need to be expanded, however, from weekly to daily as demand rises.
Kia hopes to improve bodyshop confidence in the brand by setting up a hotline offering repair guidance. The next step is for Carter & Carter, the consultants helping to set up the programme, to forge links with insurers' approved networks.
Mr Bush said: “We are not yet at a size where we can influence where insurance accident damaged cars are repaired. They will drive Kia repairs to their preferred repairers so we will need to gain their trust by ensuring high standards.
“But we will not set up our own bodyshop network until we can give them sufficient volume – this is possibly three or four years away – although our standards will be in place by January.”
Until Kia has its own fully operational network, it wants dealers to be the face that customers see for aftersales business.
“Our dealers must be the first port of call for the customer, even if they are unable to repair the car,” said Mr Bush. “That is what we are striving for. Customers should not be passed down the road to a bodyshop.
“Dealers are encouraged by our approach – they see a future in the brand and are willing to make investment. We are in a position where dealers can grow with us.”
He believes customer expectations are rising, which adds responsibility to the dealer.
“Although our cars are priced lower, customers expect the same level of service as more expensive brands. This needs to be incorporated into our aftersales strategy.”
Within the next two months, Kia will introduce a PC-based programme enabling its dealers to offer instant fast-fit and servicing quotes to customers. The company is determined to help its dealers compete in every aspect of the aftermarket with independents.
Kia recently launched an extended five-year manufacturer-backed warranty, with KIAssist roadside assistance and recovery, for all models. Dealers, who take “a small commission”, have been eager to sell the extended package as they realise the warranty will build confidence in the brand.
Customers can buy the additional fourth and fifth years' cover at any time up to the last day of the standard three-year warranty. It is also transferable if the car is sold. “It has been important to improve brand loyalty, especially now we have a full range of vehicles,” said Mr Bush. “Customers can now move up the range as their financial position or personal life changes.”
Kia considered following other manufacturers who have launched in-house insurance schemes, giving them greater control over where their cars are repaired. It has dropped the idea for now because its size did not justify the outlay.
Mr Bush said the body repair programme, headed by Bob Greagsby, would help to convince insurers that Kia knew its customers and the cost of repairs so they would give its models a competitive insurance rating.
“Research into Kia cars suggests they are involved in fewer accidents than the industry average because they have often been used as a second car, so mileage is lower,” said Mr Bush. “This is now changing as we sell more cars. “Dealers are building the Kia car parc today. Tomorrow, aftersales business could be their breadwinner.”