Kia plans 50,000 sales

Kia will command five per cent of a one-million-car Aussie market by 2010. That's the ambitious forecast of the new company-owned distributor of the Korean car maker outlined to CarPoint in Sydney this week

Taking over the distribution of the cheap and cheerful brand on March 1, Kia Motors Australia (KMAu) replaces Neville Crichton's, Ateco Automotive.

KMAu has already moved into temporary headquarters adjacent to Ateco in Sydney's Homebush but will open an impressive purpose-built facility nearby in July of this year. Around 70 people have been employed by the new operation, including 25 personnel who transferred with the brand from Ateco.

KMAu is headed up by new CEO YK Chun. Chun has strong local knowledge having worked as Kia's man on the ground in Australia for the last five years.

COO of KMAu is ex-Toyota senior manager, Stever Lotter. Lotter is joined by ex-Toyota Australia colleague, Bill Gillespie, who will head KMAu's sales and marketing effort. Key personnel have been recruited from brands like Honda and Subaru, the company says.

Under Ateco, Kia has cemented itself in the top ten of local car companies selling a record 25,293 cars and light commercials in 2005. Ateco was the second independent distributor to represent the brand Down Under. The first, Itochu, introduced the brand to Australia nine years ago.

It is Lotter and Gillespie who will largely shape the local operation and the future of the brand in Australia, and their plans are ambitious. Currently Kia has less than three per cent of the Australia market. By 2010, it will be Lotter and Gillespie's job to grow this to five per cent, or 50,000 cars on Kia's 2009/2010 Aussie new car vehicle forecast of one million units.

Key to reaching this target will be new models and new model variants, says Gillespie. And it's here that local car buyers will see the first manifestation of the new company's strategy.

To date Ateco has operated a one model, one (equipment) grade model line-up. In growing its volume and market share, KMAu will introduce new variants of its existing and new models. And soon...

First off the mark will be a hatch version of the Cerato small car. Dubbed the Euro Hatch, the five-door was unveiled at Sydney Motor Show last October but arrives in dealers this month.

According to Gillespie both Cerato and Kia's super-mini (VFACTS 'light' car) Rio will also see entry level and up-spec versions added. In the case of the Rio, KMAu is currently considering a 1.4-litre version as a 'value-for-money' offer.

The company will facelift its Sorento medium SUV later in the year and is looking at a diesel-powered offering. Expect a diesel engine to arrive in the Sportage compact SUV too, as well as a smaller (four-cylinder) petrol-engined variant and a 2WD version -- a la Hyundai's Tucson City.

The inclusion of the extra grades, body styles and engine variants is expected to boost Kia's 2006 sales. Gillespie outlined plans to significantly increase volumes across key models this year -- targets for the Rio, Cerato, Carnival and Grand Carnival peoplemovers, Sorento and Sportage are 8000, 8000, 5000, 2500 and 3600 units respectively.

In addition to the above Kia will continue to offer its K2700 light commercial. It's unlikely its top-selling Pregio van will be reintroduced this year, however.

Kia's relationship with stablemate Hyundai will likely get more abrasive in the future as the two Korean companies which share lineage, R&D resources and basic model platforms and architecture, fight it out in the local market. Fully independent operations Down Under, there will be no sharing of  'backroom' facilities between Kia and Hyundai as is the case with operations like VW and Audi or BMW and Mini.

The new company's execs concede they are going to have to win buyers from existing marques to reach their 2010 target. Though Gillespie remained coy about who will be in his sights, he stated that with Chinese and Indian brands knocking on the door, Kia could not afford to "focus only on the cheap and cheerful market".

First major launch for the new company will be the Magentis -- the Hyundai Sonata-based four-door medium car which replaces the current (and underwhelming) Optima. Arriving Down Under mid year, the new car enters perhaps the hottest segment in the local marketplace.