By Bernie Cahiles-Magkilat
Kia Philippines has cut by half its sales growth target this year after realizing they had set a very lofty 10,000-unit goal amid slower industry recovery and very active market competition.
Kia Philippines President Manny Aligada said the new recalibrated sales goal would not be that bad after all as it would mean 200 percent higher than the 2,200 units sold last year.
As of July this year, the company has grown by over 82 percent already over the same period last year. In the first half, Kia did a little over 2,000 units already.
Aligada explained that the original 10,000 sales target was set on various favorable assumptions, including a recovery from the negative 15 percent growth in 2017 when car sales took a beating from the implementation of the TRAIN Law, which imposes higher tax rate. The negative impact, however, continued to linger resulting in the delayed normalization of the industry, which grew a robust double-digit before 2017.
When the target was set, Aligada explained that part of the assumptions was that the industry would grow and go back to where it was before because there were no headwinds seen at that time.
But sales performance has so far been lackluster as industry continued to swing from modest to negative growth range. In addition, several car brands have entered the market offering very competitive rates and very attractive financing schemes.
Year 2020, however, presents the industry with a silver lining. For Kia, one of Ayala Automotive group’s car brands, plans to introduce in November this year another model Seltos.
Aligada said that Seltos, a mid-SUV brand, would compete in this volume segment. The price of Seltos is still being finalized but it is being primed at a range of P1 million to P1.4 million.
But Aligada said that Seltos would have a minimal impact on Kia’s overall sales this year given the timing of the launch, but it is expected to give the much needed boost for its 2020 performance.
“Assuming we launch it this year, the full impact will be felt next year,” he said.
Seltos, a mini SUV sedan crossover, was first launched in India a few months ago with a very encouraging market response.
“Here we hope to hit a sweet spot with P1 million to P1.4-million price range, that’s the spot that we’re trying to work out,” he said.
Seltos, a handsome fresh model, will be in the significant volume segment.“Young executives would want to embrace this,” he added.
Kia would be more optimistic for 2020 with its formidable 10-vehicle model lineup, including Seltos. Its car pricing are also expected to benefit from the preferential import duty once the Philippines-Korea Free Trade Agreement is signed in November this year.
“Next year, we’re more hopeful that apart from the industry getting real normalization, our line will be a better representation in the growing segments,” he added.