If you’re into cars and have been observing the local automotive industry in recent years, this question may have crossed your mind: What the hell is going on with Kia?
The South Korean automaker is one of the biggest in the world and boasts some of the most attractive offerings on the market. One could argue that its product line is even more compelling than Hyundai’s. And yet the market performances of these compatriot brands in our country are like night and day. While Hyundai has consistently been the third-largest car company in our territory in terms of sales — although Nissan could potentially overtake it by the end of the year — Kia has steadily declined to unimaginable depths.
Granted Kia has never been an overwhelmingly big-volume seller in the Philippines, but it did peak at 10,010 units in 2015 for a respectable 3.1% share of the market. The three years that followed, unfortunately, proved to be one sustained nightmare. Sales dipped to 7,304 vehicles (1.9%) in 2016 and then went further down to 5,186 (1.1%) in 2017. This year, it is projected that Kia will close at around 2,400 units for an appalling market share of 0.6%.
What happened? How could a strong car brand with compelling products fail so ignominiously? The simple answer: priorities. Columbian Autocar Corporation, owned by Palawan Governor Jose Ch. Alvarez, lost its focus. Its chairman, now totally immersed in politics, had turned his attention to other concerns. The car business no longer appealed to him, it seemed. So much so that he unloaded BMW to San Miguel Corporation.
Kia soldiered on but simply went through the motions. Even its marketing efforts became inexplicably baffling, putting nearly all its eggs in the Philippine Basketball Association’s expensive basket. Any observer would have been able to tell that the company was more interested in managing a basketball team than in selling motor vehicles. Predictably, all of this organizational chaos trickled down to the dealers, which lost the energy and the spirit themselves to look after the brand. Word has it that some of these Kia dealers never had their hearts in the automotive trade to begin with, and that they merely got into it because of their other business ties with Governor Alvarez.
The result? A car brand that Filipino buyers have stopped trusting and considering.
Thankfully, Ayala Corporation has entered the picture. The group’s car division, AC Automotive, has been appointed the new Kia distributor in the Philippines, with the brand re-launch scheduled for Jan. 30, 2019. Besides Kia, Ayala also distributes Volkswagen and will soon bring in a Chinese commercial vehicle brand called Maxus.
On Monday, new Kia Philippines president Emmanuel A. Aligada faced journalists for the first time in his new capacity. He presented the brand’s current business outlook and laid down his team’s immediate plans, chief of which is to “stabilize the business.” He shared his intent to quickly return to the 10,000-unit sales level and to strengthen Kia’s nationwide dealership network. He also revealed that they would be introducing three new models to our market.
But of all the sound bites he spouted at the news conference, there was one statement I particularly liked — one that assured me that the brand was finally in good hands. Asked why Ayala didn’t also acquire Kia’s professional basketball team, he replied: “We’re in the automotive business.” Something so simple and yet so clear — something that indicates the new Kia distributor knows what its priority is. And that priority is to sell cars. Not basketball, not politics, not other businesses. Just cars.
Hopefully, now that it has a new importer and seller that understands its number one job, Kia will soon regain market relevance and prominence. I’m actually rooting for it.