Kia cee´d Sportswagon hails company´s move upmarket
To launch the Korean brand in a competitive market such as the UK, Kia initially chose the marketing and sales paths of ‘stack them high – sell them cheap’.
This strategy aimed to achieve more exposure with actual vehicles on the road so creating more brand awareness by retail and business car users.
An excursion into unprofitable daily rental business increased Kia’s official UK registration figures but did little to establish the brand as one that private, business, or fleet buyers might want to own.
The setting up of a European design centre and an all-new production facility in Zilina, Slovakia, claimed to be the most efficient and productive in Europe with a capacity of 300,000 vehicles a year, changed Kia’s strategy.
Although still pushing out retail and business offers for their models there is less daily rental activity and it is now a time of consolidation.
Kia registered nearly 40,000 new cars in 2005 in the UK, nearly 36,000 in 2006 and in the first nine months of this year their sales were 22,345 a further drop of 24 per cent, which demonstrates their new policy of quality over quantity.
The launch of the European-designed and -built Kia cee’d five-door hatchback earlier this year with improved build quality, and the introduction of the seven year warranty for the cee’d, were the pivotal points in changing the public’s, and the media’s, perception of the brand and its future sales policies.
And the cee’d is already bearing fruit for Kia because it has made the final of seven new models competing for the title of European Car of the Year 2008.
The cee’d will compete against the Fiat 500, Ford Mondeo, Mazda 2, Mercedes-Benz C-Class, Nissan Qashqai and the Peugeot 308. A jury of professional motoring writers from 22 European countries judges the competition.
Although the cee’d is highly rated by the motoring media, because of its user-friendly size, build quality, high specification, very competitive pricing and the long warranty, it is likely to be the ‘outsider’ to win this annual competition. But just to be nominated for the final is a huge boost for the brand.
Another boost for the Kia and cee’d fortunes was the launch of the cee’d SW, a ‘lifestyle’ estate car from 1 September 2007. Prices initially ranged from £12,995 up to £14,995 with a 1.6-litre, 120bhp petrol and 89/113bhp turbodiesel engines. But read on.
The cee’d SW is also covered by a seven-year 100,000 mile warranty launched with the cee’d five-door hatchback. At launch the cee’d SW models were priced just £700 higher than equivalent five-door hatchback models whilst its main estate competitors, the Ford Focus, Vauxhall Astra and Renault Megane Sport Tourer show increases of up to £970 over their hatchback equivalents.
Five-speed manual gearboxes are standard but a £1,000, four-speed auto transmission is available on the 1.6-litre petrol LS model which sells for £14,995.
An auto gearbox is expected to be added for the higher power diesel engine later this year and a sporty 2.0-litre turbodiesel with automatic transmission could be added to the SW range next year depending upon demand.
However Kia has already announced that for their 2007 quarter four sales promotions, customers can now buy the cee’d SW diesel models for the same price as its petrol equivalent giving savings of up to £1,000.
This means the 1.6-litre CRDi SW GS 89bhp model costs £12,995 and the best selling 1.6-litre CRDi SW LS 113bhp model costs just £13,995.
Back to discounting?
So is Kia going back to their old ways of heavy discounting? Not so said Stephen Kitson, Kia’s UK communications director. He said, “Our quarter four promotion is done at a time when the UK market is ‘flat’ anyway and we are responding to discounting measures currently being undertaken by our competitors.
"We want to support and promote our new fleet and business users sales effort where our strategy is to offer good value for money products."
“Although we see the SW selling to retail customers in the C-segment, 82 per cent of sales in this sector are accounted for by fleet and business user-chooser customers and currently nine per cent of all C-segment sales are accounted for by estate models.
"But demand for estates is growing as people start to move away from SUVs and MPVs. Diesel variants make up 65 per cent of C-segment sales and we expect the new cee’d SW to be in line with this which means around 400 sales this year and 1,000 in 2008," he added.
Kitson added, “ When the cee’d range is complete, we will be adding the three-door models next year, we should sell around 10,000 cee’ds in the UK in a full year, 55 per cent will be five-door, 30 per cent three-door and 15 per cent we expect to be SW models.
"Whilst this latest pricing initiative is aimed at boosting fleet and business sales we expect overall that cee’d buyers will be 73 per cent retail, 15 per cent business and 12 per cent fleet customers."
He concluded, “Kia in the UK are currently growing and developing a fleet specialist dealer network. Currently we have 140 dealers, of which 45 are also fleet specialists dealing with smaller fleet buyers, businesses and user-chooser company car customers."