In 2021, after the baptism of the epidemic, chip shortage and deep adjustment, China's auto market showed a warming upward trend, bringing new opportunities. For Kia's development in China, this year has far-reaching significance. Although it faces many difficulties and challenges, from the renewal of the brand at the beginning of the year to the corporate restructuring at the end of the year, Kia has also achieved gratifying results and changed the brand perception in the hearts of consumers. In 2021, from brand renewal to corporate restructuring, Kia's brand building, new car listing, revenue improvement, and operation management in China have achieved gratifying results, which has initially changed the image and cognition of the Kia brand in the hearts of Chinese consumers.
At the 2021 Shanghai Auto Show, Kia released a new LOGO, a "customer-centric" brand concept and brand purpose, launched an Experience New Kia national test drive activity, expanded the user brand experience touchpoints, and let more Chinese consumers recognize the different new Kia. In addition, in response to the Chinese government's dual-carbon strategy, at the Guangzhou Auto Show, Kia released its corporate vision of "Sustainable Mobility Solution Provider" and "2045 Carbon Neutrality Strategy" in China, committing to becoming a sustainable mobility brand.
In 2021, Kia will continue to adjust its product structure and accelerate its mid- and high-end product layout in China through the listing of the Smart Run Ace and the fourth-generation Jawa of the "Global Flagship MPV". It is worth mentioning that as Kia's first model in China with a price of more than 300,000 yuan, since its launch in September, the sales volume of the fourth generation of Jawa in first-tier and new first-tier cities has reached 47.5%. Driven by the fourth generation of Star Models such as Jiahua, Smart Running Ace, and K5, in December 2021, Kia's average MSRP reached 141,300 yuan, an increase of 32,900 yuan compared with 2019, improving the revenue of new cars, changing the perception of kia brands in the hearts of Chinese consumers, and laying the foundation for the promotion of brand premiums.
In 2021, Kia adheres to the "retail-centric" sales method, cancels the assessment of pick-up indicators, formulates reasonable retail indicators, and continuously optimizes business policies, improving the profitability of dealers and enhancing the competitiveness of dealers in the regional market. The inventory of dealers has been reduced from 46,000 units at the end of 2020 to 19,500 units at the end of 2021, and the operating conditions have been well improved, laying the foundation for meeting future market challenges.
Based on the Turn-around strategy and "All New Kia, All New Start!" "Business policy, accelerate the implementation of global strategies, integrate global resources, and better feed the Chinese market, in 2022, Kia will open a new stage of development in China." On the eve of the Beijing Auto Show in April 2022, Kia will release a new company name, a new brand strategy, and bring five major changes to let more people see a different new Kia.
First, integrate into the global system and increase resource investment in the Chinese market. After the restructuring of the enterprise, on the one hand, it will refer to the successful experience of global Kia and introduce more global system resources; on the other hand, it will more closely combine China's actual situation and re-set sail with the attitude of a new power startup, pay more attention to the needs of Chinese consumers, and better realize the combination of globalization and localization. In the future, Yancheng will become an important hub for Kia's new energy production and overseas exports, and play an important role in Kia's global strategic layout.
Second, strengthen brand building and let new Kia penetrate the hearts of the people. The marketing headquarters has been newly established to strengthen the online and offline integrated marketing of the target groups of the MZ generation, carry out cross-border cooperation according to user preferences and life scenarios, hold IP activities such as brand days, and take advantage of the opportunity of the 30th anniversary of the establishment of diplomatic relations between China and South Korea to strengthen brand building, strengthen consumer experience, and establish an innovative brand image.
Third, the management is efficient, and an efficient organizational system is formed. Internal high-quality talents will be promoted to core positions, and at the same time, local professionals who understand the Chinese market will be introduced to greatly enhance the competitiveness of the organization. In addition, by adjusting the organizational structure and establishing an organizational system that can quickly respond to market changes, we have newly established sales training departments and other departments, increased the functions of regional business departments, strengthened the support and management of dealers, cultivated a first-class sales team with professional quality, and continuously improved sales and service capabilities.
Fourth, product quality, to provide Better choices for Chinese users. It will gradually stop production of models under 100,000 yuan, accelerate the introduction of more competitive global models, and win consumer recognition through product competitiveness. This year, Kia will unveil a new flagship SUV, the Sportage, and its hybrid version, as well as a K3 facelift. 2022 is the first year that Kia started electrification, in addition to the introduction of HEV hybrid models, the hot-selling pure electric model EV6 in overseas markets will soon be introduced into China, and it is planned to introduce at least 1 pure electric vehicle per year from next year to provide consumers with more diversified mobile solutions.
Fifth, rationalize operations and work together with dealers. Focus on the improvement of the profitability of terminal dealers, carry out business work, set pragmatic operating indicators according to the ability of dealers and the actual needs of the market, continue to promote the "retail-centric" operation mode, and achieve sustainable development with dealers.
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