Cerato not C'eed in Kia's hatch future

Kia Australia has poured cold water on the chances of its European-built C'eed hatch coming Down Under, but has confirmed the company is "seriously considering" a five-door version of the new Cerato.

Launched in late 2006, the C'eed is built at Kia's factory at Teplicka nad Váhom in Slovakia. Sharing architecture with Hyundai's i30, the five-door was expected to join the local Kia line-up later this year or in early 2010 (more here). But speaking at the launch of the company's new Cerato sedan in Melbourne last week, new company CEO and president Terry Im effectively ruled out C'eed from a future Down Under. He says transportation logistics and costs as well as production capacity rule out the Euro-inspired hatch.

That doesn't mean the there's no C segment hatch on the horizon for the Korean brand, however. Indeed, Im confirmed the brand is now looking to Korea to supply the new model.

"I have to be very careful -- because it is not fixed [confirmed for production] yet, but some markets want the hatch... And KMC [Kia Motor Company] realize that we [Australia] need some hatchback, but when Cerato was originally developed, there was no [five-door] in [the] plan," Im revealed to the Carsales network.

"I can say now that KMC is now seriously considering producing a hatch version of the Cerato," he said.

In the Kia world Australia is grouped with the SE Asian and US markets. That means our product mix tends to align with those markets. When it comes to small cars, SE Asia and the USA have been staunch sedan fanciers -- hence the launch of the new-generation Cerato as a sedan.

The Australian small car market on the other hand is split almost 50:50 hatch and sedan. Although the surprisingly accomplished new four-door Cerato will be joined by a two-door notchback coupe later in 2009 (more here /news/2009/kia/soul-and-koup-to-add-spice-to-kia-lineup-13054  ), the absence of a five-door hatchback version cuts Kia out of half of Australia's biggest new car segment.

According to Im, the gap in the product line-up could be short-lived. Indeed, he says Kia head office is almost certain to green light a five-door hatch version of the new Cerato as early as June 2009. Production would begin some time in 2010, he says.

"It's not fixed yet but as you can understand next year, middle of next year, we may be able to launch a [Cerato] hatchback. Definitely by the third quarter [of 2010] we would bring [it to Australia]," Im said.

According to the Kia boss, the car would be built alongside the sedan in Korea and use the same platform, powertrain and suspension as the Cerato sedan.

Ironically, Im says the main proponent for the hatch is the USA. There the hatch version of the outgoing Cerato, sold as the Spectra5 has been gathering sales momentum for the brand.

Also believed to be an influence in the KIA-USA's decision to bolster its hatch line-up is Hyundai's addition of a five-door wagon variant of the i30. Sold as the Elantra Touring in the USA, the compact wagon has been a modest success.

Im is new to the Kia Australia operation, having relocated from Singapore in Dec 2008. In addition to his leadship role Down Under, he retains regional responsibilities, a position that could have its advantages for the local operation.

Despite big promises Kia has failed to grow its volume or market share substantially since the factory took over local distribution responsibilities from importer Ateco in March 2006. In Ateco's last full year of sales (2005) it moved 25,293 vehicles -- Kia Australia's 06 total was over 4500 car less [3164 of which were the defunct Pregio van].

In early 2008, the company claimed it was heading towards an annual target of 27,500 cars. When the dust settled, it had sold just 19,661 -- 1324 less than its 2007 total of just under 21,000.  

In the face of difficult market conditions, Im is nothing if not more realistic than his predecessors. He says he is confident that with new Cerato, Soul (see link re Koup above) and 2009's other model releases/updates Kia can maintain its 2008 volumes in a shrinking market.

"We didn't get our target [in 2008]. Our market [share] is around 2.0 per cent. In 2007 and last year it was similar -- 1.9...  This year we are targeting the same numbers [volume] -- 19-20,000.

"Every one knows [the Australian] market is down... [But] we want to keep our market share or improve. With two additional models, new Cerato and Soul, I don't want to see less cars [sold] than last year. I'm very positive," Im stated.