Kia readying CX-3 rival

Kia will enter Australia's fast-growing compact SUV segment with an all-new small SUV to rival Mazda's CX-3 and Honda's HR-V in the third quarter of next year.

Combined with redesigned Picanto and Rio models due here in the first quarter of 2017, the as yet unseen Rio-based small 'CUV' will bolster a renewed small-car line-up from the Korean car-maker, which released a facelifted Cerato range this month, within 15 months.

Kia Australia COO Damien Meredith was cautious about revealing too much about the company's all-new B-segment SUV ahead of its world debut, which could take place at the Los Angeles or Detroit motor shows in November and January respectively.

But he made it clear it will be aimed directly at the CX-3, which starts at $19,990, and HR-V (from $24,990), plus other upcoming city SUVs like the Toyota C-HR also due in local showrooms next year.

At the same time, Meredith concedes Kia's first compact SUV will eat into sales of the Rio, just as the CX-3 turned many buyers away from the Mazda2.

"It's not a full SUV, that's why it's called a CUV," he said.

"We've got to be very strident about what effect it will have on Rio. It needs to fit into the market and do what it needs to do in the CX-3 and HR-V segment.

"As long as the aggregate is more than we lose it's OK."

Meredith confirmed the unnamed compact crossover will be based on and built alongside the new Rio in Korea. Based on design renderings he has seen, he said it will most closely resemble the Provo concept car revealed at the 2013 Geneva show (pictured).

Kia's local operations boss ruled out an Australian release for the larger Niro SUV any time soon, since it's actually slightly larger than Kia's mid-size Sportage SUV and available only as a hybrid, making it more expensive.

"We're still looking at Niro, but it has to offer something Sportage doesn't and still fit underneath Sorento," he said. "Niro is slightly larger than Sportage and hybrid only. It's hard to fit into the range."

Meredith said the all-new B-SUV will spur Kia's growth in Australia's compact car market.

"We'll remain a strong force as the under-$20,000 passenger car segment declines. We expect a lot of the manufacturers to leave that segment, but at the same time we'll grow."

Part of that sales growth is expected to come from the new Picanto micro-car and new Rio light-car, both of which could be revealed at the Paris motor show in September.

Confirmed for Australian release early next year, both models are likely to be based on their existing respective platforms but fitted with new sheetmetal, new interiors, new engines and new technologies.

While the next Rio replaces the fifth generation on sale locally since August 2011, the second-generation Picanto replaces a model first released here less than two months ago in April.

"We had the choice to wait, or bed Picanto in with dealers and get the name in front of customers. It was number one in the micro segment last month," said Meredith, who added that Kia's 200-300 monthly sales target was not ambitious given the lack of marketing by dealers due to the low profit margins involved.

Renewing Kia's fight in a shrinking micro-car segment against Holden's new Spark, Suzuki's Celerio and Mitsubishi's Mirage (but not the discontinued Nissan Micra), the new Picanto will be launched with a unique finance deal targeting university students, as revealed by motoring.com.au in March 2015.

"We'll launch new Picanto in the first quarter of next year with a very solid finance offer that's going to give young people and their parents an opportunity to get into a five-star-safe small car with a seven-year warranty for a very low cost," said Meredith.

Exact details of the finance offer are yet to be finalised, but Meredith said Kia would ensure that only uni students wwere eligible for the "unique proposition in terms of monthly repayments".

The current Picanto automatic is priced at $14,990 drive-away – $2000 less than the outgoing Rio five-door (from $16,990 drive-away), which is priced from $3000 less than the facelifted Cerato (from $19,990 drive-away).

While there will be no further Kia model launches this year, Meredith said that both the Soul small car and Rondo people-mover will be "repositioned and reinvigorated".

While North America's upcoming Soul Turbo won't be sold here, the Rondo will be bolstered by a cheaper new five-seat version that would better suit fleet buyers.

As we reported yesterday, Kia will also launch its first rear-drive passenger car in the third quarter of next year. Previewed by the 2011 GT concept, the large Stinger sedan will be priced from $40,000, positioned as a Holden Commodore rival and available with a 270kW twin-turbo V6.

Kia's Australian sales are up 24 per cent to more than 16,000 sales after the first five months of this year, meaning the Korean brand has grown more quickly than any other mainstream car-maker here, where it could climb from 12th overall last year to the top 10 in 2016.

Kia Australia sold 33,736 vehicles in 2015 – up more than 20 per cent on the previous year. Meredith said his company's target of reaching 50,000 annual sales by 2019 or 2020 could be reached up to two years earlier than planned.

What's coming from Kia in 2017:
New Rio – Q1
New Picanto – Q1
All-new small SUV – Q3
All-new large sedan – Q3