Horacio Chávez
Managing Director
Kia Motors México
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View from the Top

Improving Sales, Customer Service

Fri, 09/01/2017 - 14:21

Q: After growing over 400 percent in 2016, how confident is Kia about reaching its 80,000-unit sales target for 2017?

A: Between January and April 2017, we achieved 91.8 percent growth in sales. Local operations have also strengthened since we started producing the Forte locally in May 2016. This model was previously imported from Korea and so was subject to import tariffs. In 2017, the most important factor to increase our sales volume will be national production of the Rio. We started production in January with the Rio Hatchback and we have also launched the Rio Sedan. Locally producing 100 percent of the units that we sell in Mexico will help us reach our target of 80,000 units sold.

Q: How did the company successfully penetrate the market and grow sustainably?

A: We implemented an aggressive growth strategy following four pillars. The first was launching the brand with attractive products to position ourselves well from the outset. Sportage, Sorento and Forte are our high-end models, which we launched initially. Then we brought the more economical Rio and Soul. The second pillar of our strategy was boosting brand awareness through marketing. We broke many rules about how brands should start in a new country. We had a strong presales campaign with the “Kia on Tour” events, visiting all cities where we planned to work and scheduling test drives.

Our third pillar of growth is based on developing our distribution network. We selected the best in terms of customer service, managerial and financial capabilities to create a network of 73 dealerships that opened in just 12 months. We added 12 more sales points in July 2017, which will take us to 97 percent national coverage. Each dealership on average costs US$3.5 million to build. The final pillar in our strategy refers to our differentiating policies. We created Kia Finance, our financing arm that works in collaboration with BNP Paribas, the largest bank in Europe. Along with financing, the most attractive factor that helps garner trust from our customers is having the most extensive warranty in the Mexican market of seven years or 150,000km.

Q: How is Kia positioned among its competitors in terms of sales and aftersales services?

A: We use studies by J.D. Power as a reference. In 2017, Kia occupied the sixth position among non-premium brands. We are not yet participating in J.D. Power’s aftersales studies because the volume of repairs and maintenance we manage is still too low. Our cars are still relatively new compared to other brands and need few services but we will participate in 2018. By 2019, we hope to be rated among the top three companies with the best levels of satisfaction in the country.

Aftersales services offer the greatest opportunity in Mexico. People always doubt whether repairs made to their vehicle were necessary or not, so Kia developed a global tool called Customer Value Innovation System (CVIS) that personalizes the service. When a new vehicle is sold, the sales representative must download an application to the client’s smartphone, which generates dates for maintenance and reminders for services. Drivers can schedule appointments or reschedule, and the application shows the car’s status and when it will be ready after servicing. Even the payment can be handled through the application. We started implementing this innovation in 2016 with 30 dealerships and Mexico will be the first country where 100 percent of the dealerships will integrate the application.

Q: How do you expect your participation in the hybrid vehicle market to grow, especially in Mexico?

A: During 2016, we were less confident about introducing a hybrid vehicle to Mexico but after the environmental contingencies in Mexico City, we saw sales of hybrid vehicles from competitors dramatically increased. We have seen there are great opportunities to launch greener vehicles here. Kia had considered launching a global product in Mexico, which could have important differentiators from a traditional car. The Niro is a special vehicle designed from the beginning as a hybrid. It is the first light SUV born as a hybrid, designed to be aerodynamic and avant-garde.