In 2002, Kia and Dongfeng Motor Group joint venture to build a factory, officially stepped into the Chinese market, and Volkswagen, Toyota and other German and Japanese car brands, Kia Motors in the Chinese market when the establishment of their own development route, released a variety of cost-effective models, in the Chinese market at that time, such a strategic approach is indeed a success in all aspects.
The Kia K2 model is a very representative of how brilliant Kia Motors was in the Chinese market at that time. Kia K2 was officially listed in China in 2011, and the sales volume exceeded 10,000 after three months of listing, and then in the period from September 2011 to May 2016, the sales volume exceeded 10,000 for 56 consecutive months, and even sometimes the monthly sales could exceed 20,000, and the Volkswagen Polo, Honda Fit, and Toyota Vios in the same period were not its opponents.
Total sales of K3 and K2 in 2016
Relying on cost-effective models such as K2, K3 and smart running, Yueda Kia's total annual sales in China reached 650,000 units in 2016, which was a good result among Chinese passenger car companies at that time.
Time to 2017, with the transformation and upgrading of China's own brands and the impact of the THAAD incident in South Korea, Korean cars began to continue to decline. Yueda Kia in the offensive of its own brand has also been gradually marginalized, the low-end brand image has been deeply rooted in the hearts of the people, in this case, once sold 20,000 K2 models per month in 2017 sales were cut off, the life cycle gradually ended, brand sales also began to stagnate.
Image from the Multiplication Association
By 2021, Kia's sales in the Chinese market can reach more than 160,000 vehicles, sales have been declining for five consecutive years, according to the semi-annual report released by Yueda Investment in August 2021, the net profit attributable to shareholders is negative 1.371 billion yuan, and the loss is up 12.71% year-on-year. Under the pressure of a half-year loss of 1.3 billion yuan, even Dongfeng Motor Group, as a central enterprise, could not bear it, and at the end of 2021, it withdrew from the joint venture company of Dongfeng Yueda Kia, and since then, the Dongfeng Yueda Kia automobile brand has become history, leaving only Yueda Kia.
Dongfeng Motor's withdrawal and Kia's sales in the Chinese market, all prove that Kia's strategic policy of exchanging price for volume has lagged behind, joint venture brands to do low-end models, cost-effective models in the Chinese market is difficult to match the independent car brand in any case, how to get rid of their own "cost-effective" label, no longer take the route of low-price competition, but with product strength to win consumer recognition has become the most urgent problem for Yueda Kia to solve.
In order to reshape the brand image, Yueda Kia released a new brand logo at the 2021 Shanghai Auto Show, intending to get rid of the cheap impression that was once given to consumers through the car logo, and the new kia standard compared to the old car logo has indeed played a role in getting rid of the sense of cheapness to a certain extent, but if you want to make the brand upward, it is not enough to change the label.
Recently, Yueda Kia was once again revealed that it will gradually stop production of models below 100,000 yuan in China, accelerating the introduction of more competitive global models. It is reported that the current yueda kia less than 100,000 yuan in the sale of models for yipao, Huanchi, Freddy three models.
In the view of the travel bureau, Kia's strategy of abandoning the low-end route and opening the road up the brand is correct, and Kia also has this strength.
Once independent brand cars are also like Kia, are low-end models, cost-effective models, but they are early realization that the sales of low prices are not solid, many independent brands began to change their strategies a few years ago, began to impact the high-end automobile market, and even gave birth to a lot of positioning in the high-end car brand, such as the Great Wall's WEY, Geely's Lynk & Co, Chery's Xingtu.
Although there have been setbacks and tribulations on the road to the brand upwards, in today's development, the development of these high-end car brands is also relatively good, especially Geely's Lynk & Co brand, sales in 2021 are reaching 220,500 vehicles, occupying a place in the high-end market, but also creating a racing culture belonging to Lynk & Co.
Abandoning the low-end market and accelerating the transformation to the high-end market is something that independent brands have begun to do in the early years, although Kia's action is slower than that of independent brands, but under the blessing of Kia's independent brand strength, it is not difficult to base itself on the high-end market in the future.
It should be known that Kia Motors' global sales in 2021 reached 2777056 units, while Hyundai, which belongs to the same group, has won 3890981 sales results in the global market, and hyundai Kia Motors Group's total sales have made it the third largest automobile group in the world.
In terms of technical reserves, the strength of Hyundai Kia Group is also very strong, gearbox, engine, chassis, core accessories are produced by themselves, and it has three independent R & D institutions and factories of Mobis, Pevotai and Daimos, and Mobis is the seventh auto parts supplier in the world.
Abandoning low-end cars and focusing on the high-end market, the most important thing is the need to have the hard power to enhance the product, and Kia just has this strength. Although abandoning the long-implemented cost-effective strategy in the Chinese market may be like a hero's broken wrist for the current Yueda Kia Automobile, after the broken wrist, in the face of the more magnificent mid-to-high-end automobile market, such a broken wrist is completely worth it for Kia.