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Paul Gover22 May 2020
NEWS

Kia planning new model onslaught

First compact SUV to spearhead massive new-model blitz

When the Kia Stonic lands in Australia towards the end of this year it will leave only one piece missing from the South Korean car-maker’s vision for the future and 100,000 annual sales.

That piece is a Kia ute – but no-one is talking about it, or its potential to lift Kia beyond its short-term goal of 80,000 sales in Australia.

Instead, Kia Australia COO Damien Meredith is happy to discuss everything from the Stonic to the new Kia Sorento (pictured), which will be the first all-new model to arrive but has been delayed to August, and the new Kia Carnival that’s also coming by the end of this year.

Also coming this year – despite the COVID-19 pandemic – are updates for the Picanto, Rio and Stinger, followed in 2021 by the all-new Kia Sportage and, later, Kia Australia's first moves into electrification with the e-Niro and e-Soul, and then the first Kia ute.

“We’re going to be busy,” Meredith tells carsales bluntly, before rejecting any discussion of the ute program, despite earlier promises.

“I can be specific on some things. We’ve got a new Sorento hitting very soon. Followed by product enhancements with Picanto. A new Carnival later this year. The Stinger will get an update later this year.”

But Stonic, the Kia equivalent of the Hyundai Venue and landing in the hot compact SUV class, is his favourite.

Kia Australia is excited about the upcoming Stonic SUV

“It’s incredibly important. Look what we’ve been able to do with Seltos. The majority of sales are incremental business,” Meredith says.

“Sportage has dropped off a bit and Seltos has taken some business, but 80 per cent has been incremental business.

“We’re pulling business from most competitors. It’s new. And it’s had wonderful coverage.”

Meredith was parachuted into the Kia leadership from Hyundai Australia on a directive from company headquarters in South Korea and has just completed six years as Chief Operating Officer.

He is 63 and is expecting to complete his time in the car industry with the ‘red team’ from the Hyundai-Kia conglomerate.

“I think the attraction was specifically that Kia had been under-done in Australia from its inception. And I knew it was good product and I thought we could help develop the brand, and that’s what we did.”

He believes the twin brands have an operating advantage, even if they have completely separate sales channels in Australia.

“Being one company gives a bit of critical mass, certainly from the R&D area. But we are fierce competitors,” said Meredith.

“It’s very competitive everywhere between Hyundai and Kia, and I think that is the same in Australia. They [Korea] like ‘competitive tension’.

“But I don’t worry too much about Hyundai. I’ve got other things to focus on.”

Meredith says Kia has benefitted from a general acceptance of Korean consumer products in Australia, as well as decisions made as far back as the Global Financial Crisis.

“I think people trust the Korean brands now. There wouldn’t be a house in Australia without Korean products in it.

“There is strong trust in Korean-made product. And we’ve got to respect that and make sure we don’t lose it.

New Kia Sorento is on the way

“I think what happened during the GFC was that Hyundai made some great decisions in regard to inventory and product. Where other companies went conservative.”

His big focus for the moment is COVID-19, the same as other brands, but Meredith believes Kia has been helped because it finally reached critical mass in Australia last year, as the various elements of his long-term plan fitted into place.

“I think it’s just a confluence of different things that have come together. I think the brand is in a very strong position. The jigsaw puzzle is on its way to being complete.

“I think we’re a little ahead of schedule in terms of volume. But obviously that was before COVID.

“In market share terms we’re probably a little bit ahead of where we thought we would be. We’re at 6.6 per cent and I thought we would probably be at six by now. That was the plan.”

Meredith says “consumer trust” was the final pillar that fitted into place in 2019, allowing the company to move away from a pure price position.

“Don’t rely on the price, rely on the product. You’ve got to be consistent in your delivery of what you do. That’s communication, marketing, customer service, and the best dealers. And you have to get the value equation right.”

Meredith says COVID-19 has reinforced the existing plan, but with a stronger focus on customers, dealers, Kia staff and the company itself.

“It was a pretty simple strategy and we’ve been able to deliver. What we’ve been able to achieve is to keep business going as usual.

“We’ve got it well balanced. We’ll be able to launch all those cars and give them a fair share of voice.”

He admits the short-term goal of 80,000 sales in 2020 has been shelved and that Kia is struggling to supply its more-popular models.

“I’d like to see us get to 80,000 and see what happens after that. We have an order bank with most models, probably highlighted by Seltos. It’s probably still three months on some of the models.”

Meredith also concedes that Kia will be forced to increase prices because of the fall of the Australian dollar and competitive pressures.

“It’s common knowledge that almost everyone is going up. It is the competitive aspect of what we do. We’ll ensure we are A-OK in regards to the indexation.

“We have to make sure we’re competitive against the primary models our cars compete against. We’re working really hard on that. That’s been one of the secrets of our success, and we want to continue on that line.

Cerato is holding its own in the small car market

“A good example is Cerato. It has moved up in price, but not as dramatically as what has happened with Mazda3 and Toyota Corolla.”

Adding the Stonic to that mix could create some upset, but Meredith has – once again – a plan.

“I think we’re pretty confident that we’ll be able to find a new set of owners. And it will have minimal effect.

“What we’ve got to do with anything that enters the market, a new model or an enhancement, gives us new business. That we’re not doing business with ourselves.

“I think Stonic is going to be really important. If we can get it to do a job like Seltos, where it doesn’t affect other models, we’ll be happy. We don’t want it to affect Rio or Cerato.”

Meredith is looking beyond COVID-19 and, despite the uncertainty, believes Kia will get back on its growth path.

“I think, if and when, I think we can probably be roughly eight per cent of the Australian market. Probably around 80,000 cars in a normal year,” he said.

“With what’s coming and refreshed, I think eight per cent is realistic. We don’t talk about stretch targets, we talk about realism here.”

So, finally, what about that ute?

“I think we’ve just got to see what occurs. Whether a development happens – where and when – we’re still not sure.

“I don’t know at this point in time where or when it will happen. But it will be great for Australia if it does.”

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Written byPaul Gover
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