Editor's letter: Is this the best success story of recent times?

Kia Sportage 2022 front quarter tracking

The Kia Sportage (pictured) and the smaller Niro make up the bulk of the brand’s UK sales

Kia broke the 100,000-sale milestone in the UK in 2022, tripling its volumes compared with 15 years ago

“You set long-term and ambitious objectives not knowing when you’ll hit them, but if you’re not ambitious, you won’t grow even if your ambitions are such that it takes a long time to get there.”

Paul Philpott, president and CEO of Kia in the UK, set a hugely ambitious goal 15 years ago, when he joined Kia, for the brand to reach 100,000 sales. The goal back then, when Kia was selling around 30,000 cars a year, could be seen as fanciful. A decade and a half on, only Audi, BMW, Ford, Toyota and Volkswagen sit above it in the sales charts, and Kia grew by more than all of them last year.

Upon Philpott’s arrival, Kia was seen as a maker of cheap cars, and the brand image was just as budget. The scrappage scheme that came from the credit crunch in 2009 helped propel the brand more into the mainstream, and it coincided with the arrival of the first cars designed by Peter Schreyer, the esteemed designer who joined Kia from the Volkswagen Group.

“Once scrappage came along and took us past 50,000 in 2010/11, at that point we then had the momentum and the new cars, as well as the seven-year warranty across the board,” said Philpott. “Then 100,000 became the obvious next target.”

Philpott’s strategy was three-pronged, and no matter what the challenges of the industry he has stuck to them for more than a decade.

“One is to make the brand and the products desirable. Second is to have the best possible dealers, who are also profitable. And three is that once customers have bought into the brand, to make sure they stay with it. Though there have been different iterations of these, they have always stayed consistent.”

The growth has not been built on sand. Covid aside, Kia has grown each year since scrappage. Its residuals have been strong, and it has never had to dump a load of spare stock on the market to chase volume. It got very close to 100,000 in 2019 when it sold 97,000 cars, but resisted any temptation to break the magic 100k barrier at the end of the year by pre-registering the cars needed to get there. 

“In this industry you can create sales and registrations but you won’t be sustainable without growing demand,” said Philpott. “If you do that, then residuals will drop and you typically fall back the next year, as many manufacturers do after a growth spurt.”

The Sportage and Niro make up the bulk of the Kia range, and it was the successful launch of the previous generation Sportage that made Philpott believe 100,000 was possible. It was then the success of electric models that made it inevitable. Some 43% of Kia sales last year were electrified, and 16% of the total were fully electric. 

Kia’s success with electric cars has been the final step in changing the brand’s wider perceptions, and it now sits firmly in the mainstream. A budget brand it is no more. 

“I think that electrification has been a great leveller of brands. We are seen as a leader in electrification with the EV6, Niro, Soul, plug-ins and hybrids. Cars have really changed, and electrification has accelerated the perception change of the Kia brand. It has enabled us to be looked at with any brand, from the likes of Tesla and BMW, and also brands that now even offer cheaper products than us.”

Not only did Kia enjoy record sales in 2022, it also ended the year with its largest ever order bank. Some cars would arrive by Q2, but for most it’s Q3, and if you want an EV6, you’ll be waiting until the end of the year. The success is real, and the momentum shows no signs of slowing down.

Source: Autocar

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