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Kia to raise its fleet profile

Kia Motor UK’s retailers have a year to “hone their skills” in preparation for large increases in both used car sales and fleet business, says its managing director.

Paul Williams aims to increase Kia’s customer retention, currently at 39%, to 60% by 2009.

Consequently, he expects a large proportion of the rapidly growing Kia car parc to come back into the network as buy-backs or part exchanges.

Last week, Kia held a series of roadshows for its dealers, during which it outlined the Kia Used Cars programme it will launch later this year. “We’ve got to get our dealers committed to taking supplies and selling them. We will be changing the way that dealers get cars and how they are funded to ensure this,” says Williams.

Kia’s network currently sells a ratio of one used to one new unit, but Williams wants this to increase to one-and-a-half used per new. He realizes this will take time because of the significance of price to buyers, but adds that, from a profitability and retention viewpoint, he “can’t have them hanging on to cars”.

All cars KMUK buys back are offered to the franchised network. Williams says some dealers complain that the used stock they are offered is too expensive at CAP Clean, but on the open market cars have been achieving 4% to 5% above this, so he is confident of offering value.

Last week also marked the first Kia Motors used car ‘Big Deal Weekend’, at NK Motors in Derby. A further 20 will be held at other dealerships this year, each supported by marketing, data mining and customer liaison through KMUK.

Williams needs the used car programme in place ready for KMUK’s other focus this year: growth in fleet business.

Currently it has a 1.2% share of the corporate market, but the end of year target is 2%.

A McKenzie Myers prospecting and lead management system is being put in place to provide dealers with qualified business leads. Each showroom is being supplied with five additional corporate demonstrators, currently Sedona, Sorento, Cerato, Rio and Carens, although new Magentis will replace the Sedona this summer.

“There’s no excuse for a dealer not to have a car available. If a company wants a car for a couple of days, the dealers have to be able to offer that,” says Williams.

Kia’s core corporate offering, a C-segment car, won’t arrive until early 2007, giving dealers time to “hone their fleet skills”, he adds. KMUK will also begin work with dealers on adding service capacity.

The current franchise standard requires a minimum of two fully trained technicians per dealership, and there are about 700 in the network in total.

But Williams warns that staying at that level will mean that by 2010 there will be only sufficient capacity for warranty work alone.

Attracting technicians is a tough challenge, so a three-year Kia apprentice programme was launched last autumn to provide technicians and workshop managers for the future.

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