AM Online

Demand causes Kia price rises

Kia says ‘overwhelming’ demand for it new Rio diesel has forced it to revise its sales forecasts for 2006 and change its original plan to offer diesel at the same price as petrol.

Since the launch of the new Rio, demand in the UK has been running ahead of expectations – the company expected to sell 2,500 units this year – alongside considerable global demand.

All markets will receive less than half of the planned original volume, the company said, meaning that plans to sell 15,000 units in the UK in 2006 has been cut to 6,000 units and that has forced the company to abandon its plan to sell diesel and petrol-engined versions at the same price.

Paul Williams, managing director, said: ‘When we unveiled Rio in the UK we said we were going to continue our fight against the diesel paradox of charging more for diesel than petrol – a campaign we started with Cerato and that model attracts a diesel premium of just £700, significantly less than its competitors in the C-segment.

‘We unveiled Rio petrol and diesel at exactly the same price, but that position was based on sales volumes in 2005 and 2006 of 17,500 units with sales split roughly 60-40 in favour of diesel.

‘So far in 2005 we have only been able to supply 1,500 Rios because of production constraints caused by global demand and next year we will only get 6,000 units in total. That means the economics of our pricing strategy simply do not stand up and I am afraid that means we will not be able to hold the diesel price alongside the petrol price.’

The result is an increase in all Rio pricing: with petrol-engined versions rising to £8,495 for the 1.4 GS and £9,495 for the LX and diesel-engined versions rising to £8,995 for the 1.5 GS and £9,995 for the LX.

The new prices mean that diesel-engined ver sions of Rio will cost £500 more than their petrol equivalents.

If you are not a registered user your comment will go to AM for approval before publishing. To avoid this requirement please register or login.

Login to comment


No comments have been made yet.