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New Kia Optima won't tackle 'mighty Germans'

Date: 12 March 2015   |   Author:

Kia UK boss Paul Philpott has revealed that while the Korean brand will have a comprehensive strategy to increase its registrations in the upper medium sector, it will not be taking on the "mighty Germans" with large fleet sales.

The firm showcased its new Sportspace concept at the Geneva motor show earlier this month, and the new model is expected to inform what a new upper medium Optima estate will look like in 2016. The
next-generation Optima saloon will go on sale towards the end of this year, and Philpott said there would also be mild hybrid and plug-in hybrid versions of the Optima that would come to fruition.

However, Kia is not looking to take on BMW, Mercedes or Audi with large corporate deals on the Optima or with other models on its range. The firm's core market is with SMEs and that's not going to change in the near future.

Philpott said: "Big fleet is not where we're at. It's about doing the basics right and we'll keep it sustainable."
While some volume manufacturers are moving away from the upper medium segment, Kia is looking to steal a slice of the pie from the French manufacturers that have vacated the segment, as well as from brands like Ford and Vauxhall.

Philpott added: "If you look at the upper medium sector 85% of sales are to fleet. Of those sales, two thirds are estate, so we need to have a model offering there which can help us compete."

Kia is still a retail-focused brand, with 45% of sales going to corporate customers, and new fleet models such as the Optima will see it increase towards a 50/50 split.

"We were up 10% in true fleet last year and 10% up in retail last year and it was a strong performance. We'll build our fleet business step by step," said Philpott.

The company saw fleet volumes increase by 4.4% last year to 34,575 units, but dropped behind market growth and a place down to 13th in the sales tables behind Skoda, which enjoyed success on the back of a full year of new Octavia sales. Philpott is expecting less growth in the UK market this year and as a result is expecting true fleet sales to increase by 5%.

The brand has a lot of new product coming in 2015 with a facelifted Picanto at the end of this month, a new Sorento in April, plus a 1.0-litre petrol Ceed and the Optima before the end of the year.

Philpott revealed Kia will also be moving into new segments and while exact details are yet to be revealed, he hinted that there was a gap in Kia's line-up for a Nissan Juke rival and a sports car.