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Kia boosts its fleet appeal

Kia Motors UK plans to retain its focus on retail customers while seeking growth in the fleet and leasing sector.

Managing director Michael Cole said products such as the recently launched Sportage compact SUV and forthcoming Optima D-segment saloon are bringing more user-chooser company car drivers to the South Korean brand.

Another product expected to boost its appeal with fleets is the new Rio B-segment car, which will be available with a highly efficient, low emissions 1.1-litre diesel engine.

Currently fleet business accounts for 30% of KMUK’s new car volume.

Cole expects the new products to lift this to 40%, still lower than the industry’s 55%average, but a level which KMUK sees as acceptable.

“Retail is very important to us. For 2011 we’re still focused on offering good value for money, with good products that are well priced,” he said.

Kia’s share of the retail market has risen from 1.7% in 2008 to 3.2% in 2010, and Cole intends to keep that growth going.

A vital element has been a strengthened dealer network providing better national coverage. In the past three years more regional groups and plcs, such as Lookers, Arnold Clark and Benfield, have adopted the brand.

A few open points remain, but Cole said he’s largely happy with the network now. Its core achieved 2% return on sales in 2010 which dealers will hope to sustain in 2011.

Positive as Kia’s new car growth is, its network must not become dependent on new car profitability. Having recently done higher volumes in Motability Kia’s network can expect those cars back as used stock in the next year.

Aftersales and overhead absorption are matters which KMUK and its network must improve. Cole said the situation is improving – from 44% absorption in 2008 to 50% last year – but there is still further to go.

The growing Kia parc is helping.

Dealers are using loyalty tools such as service plans, CRM systems and the brand’s seven-year warranty.

Improved products, such as Soul, Venga, Sorento and Sportage, mean Kia is now being considered by more consumers.

However, because of the improved quality, some ranges, such as Sportage, are considerably more expensive than their precedecessors and Kia may lose some long-standing customers as a result.

However, Cole was confident most will continue with Kia and see their value for money increase. Attractive finance and PCP products ensure the cars are still accessible.

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