To support the continued rise in Personal Contract Purchase's (PCP), Kia Motors UK has put a focus on residual value management to maintain the equity in customers' cars.
Speaking at the launch of the all-new Sorento model in Marbella, Spain, Kia Motors UK president and chief executive, Paul Philpott, said: “70% of our retail sales are now on PCP, which has meant we have really focused on our residual values – we have a very structured residual value management programme and are doing very well.
“PCPs are great, they enable people to get in a new car more easily, and provided we as a manufacturer keeps demand for used cars strong, chances are the buyer will have equity left in it at the end.
“The real key to residual management though is to not distress your new product i.e. do not sell a disproportionate amount of your volume into short-cycle fleet channels, and do not actively discount your new product to such an extent that it starts to damage your used car demand and used car values.”
The new Sorento marks the beginning of Kia’s product revamp and Philpott says that dealers, having now finished the roll-out of the new Space-Identity programme, are ready and excited.
“We work on a six-year change cycle, if you look back on Kia’s history, 2009 to 2012 saw us change virtually every model in our range, and the next four years will be a very busy period for us.
“To begin with, the Sorento is such an uplift in terms of refinement that we are entering a more premium mainstream segment,” Philpott said.
Sales expectations of the new Sorento are at 3,500 units for the first 12 months of sale – an uplift of 400 on its predecessor for 2014.
“Over the last seven years we have grown from less than 30k sales a year to this year targeting over 80k sales – this just shows the growth in our product and the growth in Kia as a brand.
“The new Sorento is already here and the all-new Optima is coming towards the end of year. We have already launched facelifts for the Rio and Venga models and an update of the Picanto will be launched in April. Not only that, important changes on the Cee’d are coming in the third quarter, including a brand new 1.0-litre three cylinder turbo GDi engine,” Philpott added.