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Kia has 'no plans' for stores or online retail, says MD Paul Philpott

Paul Philpott

Kia UK managing director Paul Philpott has said that the brand has no plans to open high street stores or enter online retail, stating “excellent customer service is delivered by our dealers”.

Speaking to AM at the Paris Motor Show, Philpott said that he was yet to be convinced by the case for stores and an end-to-end online sales platform in the current market and was “very pleased” with the work of the network.

He said that the loyalty shown to certain dealers, rather than brands, showed where the power balance remains.

Philpott said: “We have a partner, Triangle in Chesterfield, who used to retail Subaru. They came on board with us and it became a joint franchise and, latterly, they dropped the Subaru franchise.

“Those customers that had previously bought Subarus now buy Kia and, while we have great product which plays a part, that is largely down to the fact that people like to do business with Triangle.

“The customer loyalty and level of personal service that the dealer network affords us will never be replicated by any other sales format.”

Philpott, who was “delighted but not surprised” by an NFDA summer survey result which placed his operation just behind Mercedes-Benz in second place, said that any future entry into shopping centre locations would likely be done in partnership with a retail partner.  

Kia’s immediate priority is addressing pressure on its network’s aftersales capacity.

Paragon’s new point-of-entry operation near Grimsby was opened earlier this year with the aim of supporting Kia’s 100,000 UK sales ambitions and Philpott said that dealers should take advantage of the facilities ability to fit upsell options.

He said that dealers do not have to have customers’ options fitted at the location – acknowledging that the process deprives them of workshop hours – but said: “It is the wise thing to do at a time when the growing Kia warranty car parc is placing a growing demand on retailers’ aftersales operations.

“Clearly, less time spent fitting these parts at the dealership frees up time for servicing commitments.”

Kia used the Paris Motor Show to showcase its new Optima Sportswagon, the Optima plug-in hybrid and Nero hybrid.

The brand is growing a network of EV specialists, with an original 12 centres now having swollen to 29 of the brand’s UK sites.

Sales staff must undergo a two-day training programme and technicians four days to qualify for the status, which also demands the installation of EV charge points, representing an investment of between £5,000 and £10,000 according to Philpott.

The new low-emission vehicles bolster a range currently benefitting from the introduction of the new Sportage earlier this year and yielding an average YTD gross profit of £130,000, according to Philpott.

Paris also saw the launch of a new Rio hatchback.

Philpott said: “If I listen to the SMMT then the UK market is set to shrink by six to seven per cent next year. If we want to maintain our market share then we need new product to sell. Thankfully we have that.”

Asked whether Brexit had put pressure on Kia’s UK operations, Philpott said that its retailers and customers would not see changes as a result of Britain’s vote to leave the EU.

He said that the brand would raise its prices by 1% in October as part of annual price changes, but added: “This was planned well in advance of the Brexit vote.”

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