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Feann Torr3 Oct 2014
NEWS

Pint-size Kia back on for Oz

Kia's Picanto micro-car now being "seriously considered" for Australia, but there's a twist

The Kia Picanto has been an on-again, off-again proposition in Australia for years, but a facelifted version of the second-generation micro-car now appears odds-on for local release in the second half of next year.

According to Kia Australia's General Manager of Media and Corporate Communications, Kevin Hepworth, the cheeky city-car is firmly back on the company's radar and its Australian launch will be unlike any other.

“Picanto is seriously back on the agenda for Australia so we're monitoring it very closely," Hepworth told small group of Aussie journalists on the eve of the 2014 Paris motor show.

"There's a facelift due next year on the car, which would make a common sense time to move it in.

"It’s not a signed off project, but where it’s been a floaty idea in the background in the past, it’s now come back to a serious proposition,” he said.

In an unusual twist, however, Hepworth said the tiny 3595mm long city runabout would be the centrepiece of "quite an innovative marketing plan" by the importer that "could set a trend which is going to blow people out of the water".

He wouldn’t be drawn on what the dynamic marketing plan will entail and how it could make the Picanto profitable here when previous business cases failed, but said the car's relatively high price would require a different approach to its local market launch.

“There’s a particular use for it in Australia, but I can’t tell you what it is at this stage,” Hepworth said. “The way you market it, who you are marketing it to, it’s all linked together into one program, that’s what’s changed."

The architect of Kia Motors Australia's 'game-changing' Picanto plan -- which could involve car sharing, leasing or guaranteed buy-back schemes to reduce the cost of ownership – is newly appointed chief executive officer Damien Meredith.

The problem that importers face in the price-sensitive micro-car segment is landed cost, and the two clear winners in 2014 have been the Mitsubishi Mirage and Fiat 500, both of which are sharply priced -- the former from $11,490.

Therefore European-sourced micros are particularly difficult to make a business case for in Australia, where the segment has contracted from 2.1 per cent to just 1.6 per cent of the overall new-vehicle market so far this year.

A case in point is Volkswagen's up! mini-car, which was axed earlier this year due to slow sales despite its $13,990 starting price.

The same problem has so far prevented Kia's sister brand Hyundai from importing the European-made i10, which would need to slot beneath the i20 light-car, which is currently priced from $15,590 and will soldier on here until the Korean car-maker can import its replacement from Europe at the right price.

Similarly, the Picanto would need to be priced lower than the cheapest Kia currently sold here, the Rio (from $15,290), but Hepworth said Kia had a trick up its sleeve to make the model profitable.

“It’s not a cheap car, and that’s always been its problem -- to find a price to sell it competitively in Australia. The cost of that car is quite substantial in the marketplace. It's not going to be a $9999 car in anyone's language.

"But if you add on the planned marketing proposal it makes it a much more acceptable car.

“The challenge is the segment it sits in. Has there been a mindset change enough for people to accept micro cars? And will the proposed planning for it be enough for that mindset to change?"

Hepworth said Kia's top-secret Picanto plan did not involve significant sales volumes, but would be a first in Australia.

“Not from our sales point of view, but as a social experiment it will be a very good idea. There’s value in all sorts of areas.

“While that segment of car in Australia is not selling in real numbers, you’ve got to find a hook for it, you’ve got to find a reason why people might buy it or consider it more strongly than otherwise.

"It'll put us at the front of part of the motoring industry in Australia. If it gets the go-ahead … lots of people will take notice, especially the people who need that sort of car."

Available in Europe in both three- and five-door body types with a 1.0-litre three-cylinder or 1.2-litre four-cylinder petrol engine, the Picanto is now in its second generation but has never made to Australia before.

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