The rise of Kia over the past few years and its growing presence in the middle-market sector is one of the great success stories of the motor industry’s recent history. With increasingly premium features that give its cars a luxurious feel, and the transition from predominantly small, economy cars to crossovers and estates, Kia has been going from strength to strength in the UK and European market; the latest addition to the Ceed family, the XCeed crossover, is only the latest example of this trend. The Automotive team had the opportunity to attend the launch event for the XCeed in Newbury, Oxfordshire, and spoke to Simon Hetherington, Commercial Director, about Kia’s plans for the future and the challenges facing the automotive industry.
Simon took on the role of Commercial Director in 2016 after 5 years working for Kia, first as Marketing Director and later as Business Development Director. His main responsibilities are sales, marketing, customer experience and dealer network. He defines himself as a people manager; in his own words, “I spend a lot of my time talking to our dealers, understanding what are they actually experiencing day to day, trying to make sure we give them the tools and the programs to support going forward”. Special occasions like today’s launch are far from an everyday occurrence, he says, but when they do happen part of his job is to liaise with the media throughout the event.
The star of the show, the brand new XCeed, is a crossover derived from the well-known Ceed; the new addition to the line-up merges the handling of the hatchback version with the practicality of the wagon, with added ground clearance to tackle off-road surfaces with confidence. Simon emphasizes the importance of the growing crossover trend in the car world, describing it as “the booming part of the market for the last 10 years”. Customers, he says, are simultaneously downsizing to smaller vehicles and opting for more practical ones, making the crossover style a perfect choice. Giving customers a wider range of choices is important to Kia, and the XCeed fills a hole in the line-up in a way that will boost sales.
Another growing trend Simon stresses the importance of is electrification and decarbonisation, two of the driving factors behind Kia’s recent strategy: the shift towards hybrids and EVs is a crucial element of their plan for the next few years, with vehicles like the e-Niro, which he describes as “the most important car in our line-up” taking centre stage in the near future. The electric version of the Soul is being launched next year, signalling the gradual move towards “electrification of every powertrain and every vehicle”. Simon then goes into detail on the practical aspects of selling EVs on a large scale, such as battery technology and degradation. All Kias, he explains, are covered by a seven-year warranty, including electric ones: this is a very long coverage period The move towards hybrids and EVS is one of the main challenges that face the automotive industry at this moment in time, but Simon’s response make it clear that Kia has fully embraced the challenge and has made electrifying its lineup one of their primary goals.
While discussing challenges faced by the industry, the conversation naturally shifts to Brexit, the prospect of which has been notoriously troubling automotive companies in the past few years, especially when thinking about a no-deal scenario. In Simon’s words, “It’s well publicized that UK automotive [industry] has made clear its concerns about a no-deal Brexit. We are a modern connected industry that relies on cross border trade in all kinds of ways”. “You can read the SMMT [report]”, he adds, referring to the 2019 UK Automotive Trade Report compiled by the Society of Motor Manufacturers and Traders, which goes into detail on the catastrophic consequences a disorderly (or, frankly, any) Brexit could bring for every aspect of automotive manufacturing and trade.
But despite the challenges that lie ahead, the impression we get from Simon is that Kia’s journey towards the future is overall a positive one; he talks enthusiastically about the company’s sport sponsorship program, one of the tools that have enabled them to enter the notoriously niche world of the mainstream car market. As a marketer, Simon sees the value of sponsoring sport events as one of the key factors behind the change in the public’s awareness and perception of the Kia brand: building “positive associations” has been one of the ways Kia was able to gain ground in the highly competitive market. Interestingly, Kia’s involvement in sports has not just been beneficial for the company itself, but has also contributed massively to the growth of women’s cricket in the UK: Kia’s partnership with the ECB (England Cricket Board) started at a time when women’s cricket was seeking to move into the professional domain. Kia’s help, in the form of sponsorship and cars to enable players to get to training camps, played a crucial role in the sport’s growth: this effort led to the establishment of the Kia Super League, the first professional women’s tournament for the “Twenty20” format of cricket.
We wrap up the interview with a conversation about Kia’s dealer network; the distribution, Simon explains, is done through a franchise network, a model typical of almost all car manufacturers. Each store is an independent business (there are about 120 scattered throughout the UK), which either owns or leases its own premises (with a couple of notable exceptions; Kia owns its dealership in Bolton and has involvement in real estate in their flagship store west of London). Kia works closely with its dealers and provides them with the tools to run successfully; the company-franchise relationship is very much valued and nurtured, and Kia is currently ranked by franchisees as number 1 dealer along with Lexus in a satisfaction survey. Part of Simon’s job is supporting dealerships in their work, and it’s clear he considers this an extremely important part of securing success and growth for the future. When asked about the possibility of going into direct-to-customer online sales, as other car manufacturers have experimented with in recent years, he replies that Kia has no such plans, and explains that to do so would undermine the franchise dealers’ work and threaten the good relationship that’s been established over the years.
Overall, the impression we get from our conversation with Simon is that Kia’s story is one of success and growth, and that it is on track for keeping up this trend in the future thanks to its willingness to embrace new market trends such as rapid electrification. Despite the poor condition of the car market at the moment due to a variety of external factors, Kia has managed to thrive and become the fifth biggest manufacturer in terms of volume; when he first joined the company twelve years ago, Simon says, the ambition was to enter in the top 10. It is clear they have come a long way, and are on course to make even bigger gains in the future, staying true to their slogan: The Power to Surprise.