Kia 2006 Annual Report Download - page 46

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KIA MOTORS 2006 Annual Report
Our 2007 export goal for the North American market is set at 416,000 units, a 13.5% increase over 2006. Our retail sales target for the US market is 360,000 units - a
rise of 22.3%.
The successful launching of the cee’d is a pivotal next step for us. The cee’d will serve as a cornerstone for us to develop a truly global management: it will also boost
demand in the mid-to-long-term horizon. Delivering the ‘Kia in Europe’ image to customers by publicizing the Slovakia plant and our European design center will
be essential in accomplishing a success in Europe. Sports marketing campaigns will continue added UEFA sponsorship. The export target for Western European
market is set at 187,000 units, a 23.6% decrease compared to 2006 - although the overall retail sales target is set at 306,000 units, or a 12.6% rise, supported by
Slovakian production.
We expect to export 60,000 units to Eastern Europe including Russia and Turkey, which would be a 0.8% increase over 2006. Kia plans to sell 78,000 retail units in the
market, a 34.5% jump over 2006, including cars manufactured from the Slovakia plant.
In other markets excluding Europe and North America, we have set a sales target of 258,000 units - a growth rate target of 28.9% compared to 2006. We are aiming
for retail sales of 221,000 units - a 17.8% increase.
In the Central & South American markets we are intending to reach an export target of 69,000 units by focusing on the major markets including Chile and Colombia.
The successful launch of the New Carens and expanding sales of our RVs should help us achieve this goal. The goal set for the African & Middle East markets is
108,000 units. We will pioneer new markets such as Tunisia and further expand sales of Picanto and RVs in major countries such as Saudi Arabia, South Africa, and
Syria. Kia also plans to proactively take part in orders from local tenders.
In the Asia/Pacific markets, our export goal is 65,000 units. We will expand our market share by increasing the RV sales of our Carnival (‘Sedona’ in some markets) in
Australia and New Zealand. We want to grow sales in Singapore and Philippines and to successfully launch the New Carens in the region. In the Chinese markets
like China, Hong Kong and Taiwan we will expand our sales through a wider dealer network, and active participations in local auto shows.
Overseas Plant Sales
Kia’s plant in China, Dongfeng Yueda Kia, with an annual capacity of 130 thousand units, saw its 2006 sales growth by 4.5%. This meant a total of 115,009 units,
versus 110,008 units in 2005.
In 2006, China’s industry demand (which excludes commercial vehicles) reached 4.23 million units, a leap of 35.1% over 2005 (3.13 million units). Kia’s Chinese
market share fell by 0.7% point, to 2.8% of the total market. Sales of the TianLiMa which will be replaced by the Rio from 2007 fared poorly. Construction of the
company’s second plant in China (annual capacity: 300 thousand units) will be completed in 2007. Plant #1 will focus on production of our Rio model and plant #2,
with its larger capacity, will produce the Cerato (known as ‘Spectra’ in some markets). This rearrangement of production capacity will yield greater efficiency and
cost savings.
Kia’s sales target for 2007 in China is 145 thousand units. To achieve this, we will focus sales efforts on our best-selling Cerato model. We will also introduce, with
great fanfare, Chinese versions of our Rio and Sportage models. Furthermore, we plan to reinforce our sales network through expanding 4S dealers, and developing
dual sales channels on the basis of each car segment.
•China M/S
Management’s Discussion & Analysis
* Source: CAAM
3.5%
2.5%
2.8%
2004 2005 2006
62,506
110,008 115,009
2004 2005 2006
* Source: Company data
•China Retail Sales (Units)