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Sales dip as Kia sets new policy

Kia Motors UK has ended the policy of chasing volume which briefly saw it become the UK’s fastest-growing car brand.

Its new management team has acknowledged that the strategy, set up when Kia took control of UK sales from MCL in 2002, was unsustainable and hurt dealer profits.

This year, Kia UK sales have nosedived 27%, though in the retail sector sales have increased by 1%.

Sales director Yaser Shabsogh, recently arrived from Ford, said dealers will be asked to chase more retail and local business sales as Kia reduces its exposure to low-profit deals with large fleets. Kia’s marketing is changing tack from the price-led campaign of recent years to a quality and design-led strategy for its Europe-orientated models.

The carmaker has growing confidence in its new models competing equally with Japanese rival brands on quality. Kia bosses in Korea are considering applying the seven-year comprehensive warranty offered on Cee’d to all models in the future. It will definitely be applied to all Cee’d variants, including the forthcoming SW estate and three-door hatch.

Paul Philpott, managing director, said: “We must be more confident in our products and the sales and marketing message we put out.

“The brand grew quickly off the back of cheap vehicles which were well put together but since the end of 2005 we have seen sales decline around 40% as our price advantage has been gradually closed down.”

Philpott added: “Kia was also sending out the wrong message in terms of value. We were offering £1 deposits or £1,000 cashback. It was a value message but people had no idea what our cars were like.”

It was a strategy that also disillusioned Kia’s 140-strong dealer network.

In last year’s NFDA dealer attitude survey, Kia finished 30th out of 32 brands.

Philpott said: “To get back on track in both the retail and fleet markets, growth has to be based on customer service and aftersales development in partnership with the dealer network.

“We want to be in the top 10 retail players and we want to drive forward with bright modern dealerships and dealers who want to grow and invest in the brand.

He added: “The quality of our cars is now every bit as good as the Japanese makes, but some of our dealers are not aligned with our new way of doing business.

“Not all of them will be with us in two years’ time but we hope many will want to make the necessary investments to help grow the brand.”

  • Coinciding with the launch of Cee’d SW this month is a new dealer training initiative which combines online learning with a manual textbook. Both include learning exercises that require dealers to investigate features and benefits of the SW.
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