At the end of the year and the beginning of the year, Kia ushered in a turning point in the Chinese market, and after the withdrawal of "Dongfeng", the joint venture company changed from three parties to two parties, Yueda and Kia. What adjustments will occur to Kia's China strategy next? How do I change subtraction into a blessing? How do I rebrand? How do you start again with a new attitude? The upcoming year of 2022 is particularly important for Kia, which is regarded as the first year of the second phase of development in China.
In fact, jumping out of China to look at the world, Kia has also had a low period in the Us and European markets, but to this day, Hyundai Kia is still one of the world's five major automotive groups. As a regular on the list of the world's top 500 and the world's top 100 most valuable brands, Hyundai-Kia ranked fourth in the world in terms of sales in 2020; its sales volume in the first three quarters of 2021 ranked third in the world, of which the European market sales in September surpassed Toyota and Volkswagen, becoming the largest non-local car company in the region.
These are all the confidences of Kia to feed the Chinese market, so since it is the first year of development, it is to bid farewell to the past and wrestle for the future. "In the face of the rapidly changing market pattern, Kia will start again in the Chinese market with the new attitude of 'new power startups', and increase investment in brands, technologies, products and other aspects with a 'more Chinese' attitude and action to better meet the needs of Chinese consumers." Liu Changsheng, general manager of Dongfeng Yueda Kia, said.
Take hybridization as a stepping stone to the Chinese market
In fact, as early as the beginning of 2021, when Kia released its new LOGO and removed the word "car" from the company's name, it was already seen that it was determined to break through the positioning of traditional automakers and transform into a future mobility service provider. In the face of the world's largest new energy vehicle market, Kia will not only not give up the opportunity to deepen the Chinese market, but also cut into it as the forefront of sustainable development in the future.
In 2020, Kia released the "Plan S" medium- and long-term strategy, committed to the transformation to the two core directions of "electric vehicles" and "environmentally friendly mobility". Later, according to the strategic deployment revised at the beginning of 2021, it is planned to expand electric vehicles to 11 models by 2026, of which 7 are E-GMP special electric vehicles; by 2030, the global sales of new energy models will reach 1.6 million, and the sales of pure electric vehicles will reach 880,000 vehicles, accounting for 55% of total sales, and rank among the world's first-class electric vehicle brands.
At the end of 2021, Kia also announced its corporate vision to become a "sustainable mobility solution provider" and a "Carbon Neutrality Strategy 2045" to achieve carbon neutrality across the entire corporate value chain by 2045. That is, by 2030, the use rate of recycled materials in vehicle production will be more than 20%, by 2040, it will be 100% electrified in major global markets, and solar power generation systems will be introduced in production facilities in Factories in South Korea, the United States, and China to complete the conversion to renewable energy.
It has to be said that behind the transformation to electrification is the support of Kia's strong technical strength. It should be known that Kia is one of the few car companies in the world that has a comprehensive layout of multi-power energy, and has a deep accumulation in the four major technical fields of hybrid, pure electric, plug-in hybrid and fuel cells, and has mastered core technologies such as E-GMP, a global modular platform for electric vehicles.
Among them, the E-GMP platform, as a special platform for Kia's global electric vehicle module type, can realize the research and development from cars, CUV and SUVs to high-performance and high-efficiency models, especially the optimal design of electric vehicles and the application of a number of new technologies, which are not only safer, more spacious and more driver-friendly, but also provide passenger and battery safety.
The EV6, the first dedicated electric vehicle developed on the E-GMP platform, has been widely recognized by European consumers as early as the early stage of global sales. For example, in October 2021, the EV6 won the "2022 German Car of the Year Award" Best Model Award; in November of the same year, ev6 won the "Crossover of the Year" honor in the "TopGear" selection.
According to relevant sources, EV6 will be introduced to the Chinese market at the end of 2022 or the beginning of 2023. In this regard, Liu Changsheng is also very clear that good sales in Europe do not mean that they sell well in the Chinese market, "We have to prove in the Chinese market that users like or know what kia is." To this end, Kia plans to invest a new and high-end electric vehicle in the Chinese market every year, and try to expand its layout in China in the form of imported electric vehicles.
At the same time, the hybrid as a stepping stone in the Chinese market, "from 2022, Kia will introduce hybrid models to the Chinese market, after a small range of success in the market segment, and then summarize the successful experience, become the general direction of efforts, to achieve hybrid and pure electricity sales accounted for 50:50." Liu Changsheng said.
Choose to take the boutique product route
It can be clear that after leaving the East Wind, Kia attaches more and more importance to the Chinese market, not weaker, and China is still an important part of Kia's globalization strategic layout. After all, China has a pivotal role in promoting the development of the global automotive industry.
In this context, Kia decided to start with the product structure to change, will accelerate the introduction of global models, bring consumers higher quality products, and gradually stop production of models below 100,000 yuan, so as to get rid of the stereotype that Korean cars are only cost-effective in the hearts of the Chinese people.
In fact, in mature markets such as the United States and Europe, Kia has long since got rid of the label of "cost performance" and participated in market competition through high-quality and high-quality products. In May 2021, Kia sold more than 50 million vehicles in the global market, which means that Kia has won the trust of more than 50 million consumers. Even in the Chinese market, the upward effect of the Kia brand has begun to appear, with the launch of a series of high value-added models such as the K5, Smart Running Ace, and the fourth generation of Jawa, the revenue of dealers and manufacturers has improved.
Taking the fourth generation of Jawa as an example, as Kia's first model priced at more than 300,000 yuan in China, its sales in first-tier cities such as Beijing and Shanghai have reached 26%, which is of great significance to Kia's quality route. And with the listing of the Smart Run Ace and the fourth generation of Jawa, Kia's sales share of more than 140,000 yuan in the SUV and MPV market has also increased from 11% to 64%.
At the same time, in order to comply with the trend of China's consumption upgrading, Kia will accelerate the introduction of global high-quality models and win the recognition of Chinese consumers through solid product competitiveness, thus completely changing the development of Kia in China. It is understood that Kia will launch a new flagship SUV Sportage and K3 mid-term modification model in 2022. In this way, the introduction of high-quality models may be the beginning of a new understanding of Kia by Chinese consumers.
As we all know, Kia's return to the peak of 645,000 vehicles in 2016 is not something that can be achieved in a short period of time. In order to avoid entering the unrealistic sales trap, Kia does not want to compete in a hurry with low prices, and does not want to achieve sales increase by pressing dealers to pick up cars, but began to choose to take the boutique product route, and according to the actual product capabilities and dealer capabilities to carry out reasonable sales.
Comprehensively upgrade your dealer network
From 2022 onwards, Kia will comprehensively upgrade its dealer network and establish a sales system that can respond quickly to market changes. In just a few years, Kia has expanded to more than 5,000 dealerships worldwide, covering more than 180 countries. As for the reform of China's dealer network, Kia will not copy the global model 100%.
For example, Kia will continue to promote the "retail-centric mode of operation" and formulate more scientific and reasonable retail indicators and policies according to market conditions to reduce dealers' burden operations; lay out high-end direct experience centers and characteristic urban experience stores in major cities across the country to provide Chinese users with service experiences beyond expectations; increase the launch of new models to boost market confidence for dealers and stimulate dealer vitality.
It is also reported that before 2023, Kia will also have imported models into China, and its sales model will likely refer to the sales of 4S stores and ID Stores after the listing of Volkswagen ID, and Kia does not rule out promoting the sales of imported cars through 4S store agents, city stores, and business circle stores.
In addition, Kia will also provide users with a new brand experience, strengthen the online and offline integrated marketing of the MZ generation as the target group, and carry out localization promotion according to the user preferences and life scenarios of the MZ generation, such as with the help of Kia Global Australian Open, LOL League of Legends and other event resources, to create experience-based marketing innovation.
Kia stressed that it is necessary to base itself on the Chinese market with a "more Chinese" attitude, so it attaches more importance to the needs of Chinese consumers and continuously strengthens its investment in technology research and development in China by relying on its strong technical strength. For example, the Yantai Technology R&D Center and the newly established Shanghai Digital Technology R&D Center are aimed at integrating the needs of Chinese consumers into product research and development, and only by fully understanding the needs of Chinese consumers can they regain the favor of Chinese consumers.
It should be noted that Kia, after leaving Dongfeng, still has independent car-making qualifications. At present, the serial number of the Ministry of Industry and Information Technology announcement catalogue used by Dongfeng Yueda Kia is No. 47, which continues to use the original announcement serial number of "Jiangsu Yueda Kia Automobile Co., Ltd.", that is, the catalog serial number of Yancheng Automobile General Factory in the 1990s, and the product code of Dongfeng Yueda Kia is also the enterprise code of the original Yancheng Automobile General Factory, and does not use the catalog serial number of Dongfeng. Therefore, in its global strategic layout, Kia has also made Yancheng an important global production and export hub.
At the same time, the establishment of an efficient brand management system from the inside out is also a top priority for Kia next year. First of all, we must establish an efficient organizational management system, including the introduction of local talents who understand the Chinese market better; at the same time, promote internal high-quality talents. "To feed back the Chinese market, we must not only combine the actual situation in China, but also refer to the global successful experience, just like China's new power startups, with a sincere attitude to operate Kia's market in China." Liu Changsheng stressed.