WHEN South Korea’s oldest and second-largest selling car brand Kia went “dark” in the Philippines early this year, the industry groped for answers, and restless speculation of a takeover by a corporate giant ran rife.
On Dec. 17, Emmanuel A. Aligada for the first time faced journalists in his official capacity as the president of Kia Philippines, which is now majority owned by Ayala Corporation (AC) Automotive Business Services, Inc., operating under AC Industrials (ACI).
Mr. Aligada disclosed some of the important details of the takeover, including this: On Jan. 30, 2019, three new models (yet to be named) will signal the Kia brand’s re-launch in the Philippines.
He revealed that it was only on Dec. 5 that ACI was appointed the official distributor of the Kia brand in the country, replacing Columbian Autocar Corporation (CAC). But since then, Mr. Aligada said the company has gone into overdrive to “shift the situation around” for Kia.
BULLISH
Mr. Aligada takes his cue from the stellar local performance of another Korean brand — Hyundai. He said that Hyundai’s recent accomplishment as the third top auto seller in the Philippines gave one of two compelling reasons for ACI and Kia Motors Corporation in Seoul to believe that Kia could also “compete on the same level” here (Hyundai Motor has a 33.8% stake in Kia Motors).
The other reason is that he believes that a year that has been somewhat cruel to the Philippine auto industry would soon come to an end.
“Kia’s Korean headquarters is very bullish about the Philippine market…. We’ve seen 2018 as an irregular hump which should normalize starting next year. Kia headquarters is very confident that there would be a synergy and compatibility between the Kia brand and the Ayala brand, for the [shared values of] quality, customer experience and reliability [as seen in our nearly 30 years in the automotive business]. They are confident that we can bring Kia in the Philippines to levels never seen before,” Mr. Aligada said.
He added Kia, represented in over 185 countries, presents AC Automotive the opportunity to become a more significant player in the Philippines. Kia’s global volumes and multiple assembly sites also assure the Philippines of steady and substantial volumes, as well as market share.
“Kia is a fighting brand,” Mr. Aligada stressed. “Even today, our lineup can be active players in the segments they are in. They are present in 60% of the total market segments of the automotive industry,” he said, referring to the Kia Rio Hatchback, Rio Sedan, Forte Sedan, Sorento, Picanto, Soul, Sportage, the K2500 commercial truck, and the Carnival MPV.
“These models were the players at the time Kia hit the 10,000-unit sales [mark, in 2015] and the 4.1% market share [in 2012]. We think that if we position things well, offer them the right way, and make people want to line up in the dealerships [for them], this team of cars can get back to those levels three years ago.”
Along with the three new vehicles to be launched on Jan. 30, a number well exceeding the targeted 10,000 units is feasible as well, according to the executive.
“Kia as an international brand is very strong, known for its durability, reliability and after-sales [service]. We want to bring that back into the Philippines and use that [strength] as our springboard.”
TURNAROUND
From Day One of the takeover, Mr. Aligada said that Kia Philippines has been assembling a team that could make that “U-turn” for Kia the fastest, most efficient way possible. It’s a turnaround process that he hopes wouldn’t take all of 2019 to accomplish.
“From now up to 2019, our objective is to stabilize the business, build on the Kia brand emphasizing on the Ayala partnership, and to revive the interest in the brand. Then we’ll have to strengthen the dealer network and maximize the current presence, then introduce competitive financing packages to drive sales.”
Mr. Aligada noted there are already 37 Kia dealerships in the Philippines, only 10 of which are in Metro Manila. Apart from that, he also pointed out that Kia dealerships are also absent in northern and southern Luzon, western Philippines (Palawan), and in many parts of Mindanao.
“We are already engaging a team looking at how we are going to expand this. It takes about a year, at best, to put up a new dealership. So, we’re looking at moving simultaneously to get the multiple expansion efforts in place,” he revealed.
More than just adding new dealerships, Mr. Aligada also stressed that the quality of the after-sales service would also have to be greatly enhanced.
“The dealership facilities will have to be expanded” so that they would be aligned with Kia’s global reputation in after-sales.
And as far as marketing the new Kia Philippines goes, he said; “By Jan. 30, there will be a major marketing push here in Metro Manila, in the Visayas, and in Mindanao just a few days apart, an effort that has never been seen before for this brand.”
