Pendragon accounts for the bulk of the new Kia locations with eight dealerships throughout England and Wales, while Arnold Clark strengthens Kia’s Scottish presence with three.
Reg Vardy has an outlet in Stockton-on-Tees and this month acquired a dual franchised Kia/Chevrolet site from Priory. It is expected to open a third site in the north east shortly.
While welcoming the “three heavyweights on board”, Kia UK managing director Paul Williams stresses that the expansion is not designed to bring bigger operations in at the cost of existing loyal partners.
“We must be aware of maintaining a balance between the new franchises and our existing smaller plcs and owner/drivers,” he says.
Pendragon chief executive Trevor Finn admits he wanted 20 Kia dealerships but was advised by the carmaker that it did not want plcs to annex or replace existing satisfactory franchise holders.
“I would like to see us account for over 5% of Kia’s volume. It is not a move downmarket but broadens our spectrum. It’s not a vast investment: hundreds of thousands of pounds, not millions,” says Finn.
“We will devote dedicated management to what is a growing, ever larger piece of the market as the paradigms of the market place change and people seek more for their money.”
Pendragon’s move into Cardiff involved buying existing franchisee Philog St Mellons, a former Kia dealer of the year finalist. Kia calls it an “amicable agreement with someone who did not want to continue on Kia’s journey”.
Finn does not rule out acquiring more existing Kia operations. He replaced MG Rover franchises at “two or three” locations and is believed to be keen to increase Kia representation to 12 sites in the longer term.
“Do we get special terms? Special concessions would be very nice,” he says. “Sometimes the expectation people have of us is a little bit higher and it is presumed we will do the job. We have no major advantages over any other larger volume retailer.”
Kia now has 164 dealers. It intends to add another four this year and has a target of 200 to cope with the anticipated volume of 100,000 cars by 2010.
“We must increase representation and bring to the brand people with the foresight to invest in our joint future by opening prestige developments in locations that will deliver higher public awareness,” says Williams.