Kia enjoys half-year sales boost despite market downturn

Despite economic gloom affecting the automotive market, Kia’s high-quality range of excellent-value cars is bucking the trend with 2008 half-year sales up by 29 per cent, compared to the first six months of 2007.

Kia underwent a major restructure during the last year including completing the launch of a young range of cars, focussing the network on retail and local business sales and constructing a stronger dealer network. All these changes have merged to provide the basis for strong growth in 2008 and beyond.

Kia’s first six months cumulative sales of 18,351 included a total of 5,515 cee’d models – a massive percentage increase over last year. However, Managing Director Paul Philpott said it was the volume and the percentage growth that mattered most with cee’d.

“At this time last year we had only launched the five-door version of cee’d and to support its sales we were also getting stuck into a major restructure. We reviewed our head office operation, our sales and marketing strategy and re-evaluated our dealer network in order to support this fantastic new product.

“In the past we relied heavily on Picanto and direct fleet sales – neither was a very profitable channel for dealers or ourselves and that had to change. What is important about the half-year now is that not only have we hit the objectives we set but we have increased our retail market share and that drives dealer profitability. We hit 1.9 per cent in June and we have been doing that kind of level every month,” he added.

The cee’d is now Kia’s biggest seller, representing almost a third of all sales and even in June it maintained its year on year performance improvement despite the tough market conditions.

Philpott said: “Although the market is down we have not had to resort to heavy discounting in order to maintain our performance. Our dealers are achieving high conversion rates with customers and it is clear that those people in the market are looking for the quality and reassurance that our market-leading seven-year warranty on cee’d and Sportage gives. One dealer told me recently that of eight customers who walked through the door on a particular day, five placed orders – so the customers are there, they just have to be shown the quality and value of Kia.

“The work we have done to bring stability to our market offering is helping our dealers improve their profitability. No-one is saying the rest of this year will be easy – it will be tough – but with good quality product and discipline I believe Kia’s success will continue,” he commented.

The strong performance by Kia in the UK has put it at the top of the pile in Europe – out-performing Germany, Spain and Italy. And the UK was only 450 units short of snatching the number two export market title within the Kia global network. Although the United States is the biggest market for exports by a long way, the half-year performance in the UK was hot on the heels of Canada – Philpott and Kia UK’s next target!

Philpott commented: “We said we wanted to grow sales by 20 per cent in 2008 to show that this brand was back on track and properly centred on profitable retail sales. Well, we have got to the half way point and our strategy is working. We will continue to fill open points in our network with the best quality dealers. We will continue to avoid high-cost and residual-damaging short-term fleet deals, leaving the majority of our business sales to the dealer network. We shall continue to offer strong, consistent customer incentive programmes that do not detract from the quality of our products or damage their values down the line. And we shall continue to press the factories to further improve quality and contain prices.

“I believe that will help us achieve our goal for the year and build the Kia brand strongly amongst independently-minded retail and business customers who are fed up of being enticed by deals that promise a lot but don’t deliver real quality and enjoyment. And with a clutch of all-new products in the pipeline for later this year and next, the future will be even more exciting!” he concluded.

For the record Kia’s half-year performance saw a total of 18,351 sales – up 29 per cent over 2007. cee’d performance was 5,515 – an increase of 137 per cent. In June Kia sold 3,081 vehicles compared to 2,563 in June 2007 – an increase of 20 per cent. Retail sales were 9,848 – up 22 per cent and business and fleet sales were 8,503 – 39 per cent up. Kia’s year-to-date market share was 1.5 per cent, the same as its June month performance although the market was down by 6 per cent.