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Kia rules out moving into high-cost rental business

Date: 17 April 2013   |   Author: Rachel Burgess

Kia cannot continue to grow at its current pace without entering high-cost fleet business, something it will not do, according to the firm's UK boss Paul Philpott. While rental volume increased in 2012, due to running out the former Ceed, levels would return to 10% from 15% this year, he added.

"Now it is about stretching the brand in various places by improving dealer throughput. We can't sustain the dramatic growth of recent times - we've doubled our sales in four years - without going into high-cost fleet, which we're not going to do," Philpott said.

The firm is currently expanding its fleet specialist network from 16 to 25 sites while a service plan for small businesses will launch in the summer.

"We've been really successful with our retail service plan, and we're working on similar for SMEs. It is a tool for dealers to use with the local business community."

He continued: "Key to our fleet growth is developing relationships with the leasing industry.

"We are currently recruiting our second leasing manager and between the two, they will talk to the top 30 contract hire firms. We believe by working more closely with them for product info and to understand where the brand is going, we can drive more business."

The Sportage and new Ceed continue to be strong in fleet, with the estate and five-door each accounting for around 40% of the lower medium car's sales.

The three-door, which is aimed at user choosers, makes up 20%. The sporty Ceed and Proceed GT, revealed at the Geneva motor show, will only sell 5% of total Ceed volume but are about "image and aspiration".

"It's the right product now for the Ceed and Kia's image to move to the next level," said Philpott.

"We're in all the segments now, with the Carens MPV arriving in May, which completes our revitalised range.

"However, aside from the Ceed, Sportage and Venga, which are produced in Europe, supply of other cars from Korea is limited. We'd like to have more Optimas, for example."

He concluded that there is a three-pronged approach to fleet: leasing companies, business specialist dealers and dealers having the tools to sell to local fleets.

Kia registered 66,000 cars in 2012, with 34,000 in fleet. It expects to pass 70,000 overall this year.



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