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Kia poised for success in company car sector

  • Kia looks set to reach 2020 growth target
  • New Optima and Sportage among the key products about to be launched
  • Research shows environmental impact is an important consideration for company car drivers

When Kia stated it wanted to sell 100,000 cars a year by 2020, many (including us) thought it was a pretty ambitious target. However, the Korean firm has been on quite a journey over recent years, successfully turning around its brand perception and increasing sales year-on-year.

In fact, the firm is on track to sell 80,000 cars this year in the UK, a huge increase in comparison with 2007 when it sold just 30,000.

New products will be key

With many new products set to be released over the next couple of years, sales look set to increase even further. First will be the Optima in January 2016, closely followed by the next-generation Sportage (below) which will offer sub-120g/km CO2 emissions. An estate version of the Optima will also be launched later in the year following the success of the Kia Ceed Sportwagon which was facelifted in 2015. 

Further products set to be launched include a pair of new small cars, but Kia is keeping tight-lipped about these new models for the time being.

“The next three years is going to be exciting as a lot of our products will be coming to the end of their six-year product cycle,” said Paul Philpott, President and CEO of Kia Motors UK.

The rapid growth in the fleet sector has been a surprise to Kia, and the firm now predicts up to 50 percent of its sales this year (some 40,000) will be company cars. When you consider that 27,000 cars were sold into fleet back in 2011, it’s quite an achievement for the firm.

Environmental impact now more important

To help Kia plan for the next couple of years, research was undertaken into what fleets consider top priorities during the choosing process.

Previously cost of ownership has been an important focus, but according to Kia’s research the priorities are shifting slightly with many fleet managers stating that eco-friendly cars are equally important along with fuel economy and design appeal.

The top three reasons indicated in the research are:

  • Appearance - 43 percent
  • Environmental friendliness - 42 percent
  • Fuel efficiency - 32 percent

The research showed that in the next five years fleets are expecting environmentally focussed cars like hybrids and electric cars to make up as much as 50 percent of their total fleet. That's a huge leap from the average five percent they currently represent.

John Hargreaves, head of fleet and remarketing at Kia Motors UK said, “What our research clearly shows us is that while cost efficiency is high on the fleet manager’s agenda, it might not always be the deciding factor when choosing cars for their fleet. It is also interesting to see that eco-friendly features such as ISG and efficient engines are now as important as the appearance of the car.”

The research was conducted prior to the Volkswagen emissions scandal and the Korean firm believes in the wake of this, fleets and company car drivers will be prioritising the environmental credentials of new cars even more.

Although Kia was not the first to launch alternatively powered cars (the Kia Soul was the brand's first electric car - pictured below), the firm believes it is now in a good position to capitalise on people's changing needs.

“Our powertrain story is going to be a strong one over the next two to three years and will play a key part in our fleet growth," explained Philpott. 

"We already have an EV in the Soul, a hybrid will be coming next year and a plug-in version of the Optima late in 2016, plus we are currently investigating the possibilities of hydrogen technology so we are well-equipped to offer a wide range of options for company car drivers."

"We’re not competing with BMW"

Interior quality and driving dynamics will be a key focus for the next generation of Kia cars (see the new Optima's cabin below), an area the brand has been criticised for in the past.

Philpott is keen to stress though that the firm will not be competing against premium brands like Audi and BMW.

“We don’t pretend to be a premium brand and we don’t have ambition to be the Korean BMW. Instead we are looking to compete with mainstream brands. What you’ll see when we roll out our next wave of products is improved interior quality and cars which are more enjoyable to drive.”

Kia is also considering the possibility of a business-specific trim similar to what brands like Vauxhall, BMW and Skoda have done, particularly for the Optima which will be a core fleet car. But for now we can expect the usual 1,2,3 and 4 grade structure for future cars.