Kia 2009 Annual Report Download - page 30

REDEFINING
MOBILITY
KIA MOTORS
ANNUAL REPORT
2009

REDEFINING
MOBILITY
KIA MOTORS
ANNUAL REPORT
2009

MANAGEMENT’S
DISCUSSION & ANALYSIS
players used this opportunity to promote brand-specic launches
of value-added new vehicles.
Overall sales of passenger cars rose by 18.8% (+152,834 units),
as new models of popular domestic brands (EQUUS, SM3, SM5,
Matiz, Forte Koup) were launched. In the RV segment, demand
rose by 23.0% (+52,610 units), buoyed mostly by new launches of
the Sorento R (Sorento) and Tucson IX. Commercial vehicle sales
rose more modestly, gaining 6.7%.
Looking at Korean demand for import cars, total sales posted
a slight increase for the year, but market share slipped by 0.6
percentage points to 5.3%. Japanese vehicles showed the
strongest gains in terms of unit sales, but unfavorable exchange
rates during the rst half of the year led to a contraction in their
total market share.
Overall, Kia Motors reported annual unit sales growth of 29.0%
(+92,691 units), capturing an additional 2.5% market share to
command a total domestic share of 28.2%.
Our top-performing models were the New Morning (Picanto),
Forte (Cerato) and K7 (Cadenza), which led the 7.4% growth
(+51,664 units) in Kia’s passenger vehicle sales. In the RV segment,
the continuing popularity of Soul and Sportage, along with the
launch of the Sorento R (Sorento), pushed annual sales up by
2008 2009 Change (thousand units, %)
Segment
Domestic Domestic Domestic
Market KIA M/S Market KIA M/S Market change(%) KIA change(%) M/S
PCs 814 189 23.2 967 241 24.9 153 18.8 52 27.4 1.7
RVs 229 92 40.2 282 129 45.8 53 23.0 37 40.0 5.6
Commercial 204 39 19.2 217 43 19.9 13 6.7 4 10.7 0.7
Total 1,247 320 25.7 1,466 413 28.2 219 17.6 93 29.0 2.5
* Based on KAMA new registrations data; there may be slight dierences with the company’s data
2007 2008 2009
(thousand units, %)
Particulars
Sales M/S Sales M/S Sales M/S
Kia 263 20.9 320 25.7 413 28.2
Hyundai 619 49.0 569 45.6 700 47.7
GM-Daewoo 139 11.0 127 10.2 105 7.2
Ssangyong 59 4.7 41 3.3 22 1.5
Renault-Samsung 117 9.3 103 8.3 137 9.3
Others 65 5.1 86 6.9 88 6.0 Imports, etc.
Total 1,262 100 1,246 100 1,465 100
* Based on KAMA new registrations data; there may be slight dierences with the company’s data
MARKET SHARE BY DOMESTIC MANUFACTURES DOMESTIC, 2009
40.0% (+36,827 units), placing Kia Motors at the top of market
share for this segment. Sales of Kia’s commercial vehicles,
meanwhile, outpaced the market with 10.7% growth (+4,200
units), mostly attributable to purchases by self-employed
individuals.
In 2009, Kia maintained up a steady pace of new product launches
to improve vehicle quality, particularly focusing on design
esthetics and fuel eciency. We were therefore able to compete
eectively with similar new launches by our competitors, and take
advantage of the government’s measures to stimulate auto sales.
The Sorento R, Forte Koup and K7 were especially instrumental
in expanding Kia’s market share and strengthening our overall
lineup.
2010 is expected to see a decline in domestic sales as the
government’s stimulus measures are withdrawn. This, however,
should be offset somewhat by organic sales growth in line with
the nascent economic recovery that is now underway.
Kia Motors’ strategy for this year is to press forward with new
product launches that will raise our market profile even higher,
and intensify our marketing activities. These will include strategic
alliances with other top-tier companies, acting as an official
sponsor of the 2010 FIFA World Cup, and co-promoting our
vehicles along with the Kia Tigers pro baseball team.
OVERSEAS SALES AND STRATEGIES
In 2009, Kia Motors fought to protect its market share amid a
global decline in demand for automobiles. We adopted a mixed
production system to increase flexibility, reduce inventory and
increase our responsiveness to changing market conditions.
At the same time, we took advantage of foreign governments’
stimulus measures to boost auto sales, and conducted aggressive
marketing campaigns to raise brand awareness of our products.
The result was a rise in Kia’s overseas retail sales to 1,650,500 units,
with Forte (Cerato) and Soul leading the way in growth.
We are looking forward to a gradual turnaround in demand next
year, although we expect erce competition in the US market, as
major rivals step up their eorts to re-establish themselves in the
world’s most important auto market. In Europe, meanwhile, the
withdrawal of government scrappage support for older models is
expected to lead to a decline in demand. Kia’s response will be to
strengthen its oversight and management of foreign plants, while
timing new product launches carefully so as to achieve maximum
impact. New versions of the Lotze (Optima) and Sportage are
now being prepared for market, and our overseas dealer network
is being strengthened with a focus on major cities and dealer
incentive programs. We also expect to receive a boost from our
high-profile sponsorship of the 2010 FIFA World Cup in South
Africa.
US market
Kia Motors recorded a very successful year in the US in 2009. While
total demand shrank by over 20%, Kia was able to raise sales by
9.8% (+300,000 units), while also expanding market share to the
3% range. We launched an intensive TV advertising blitz in the
summer months to take advantage of the US car disposal program
incentives, backing the campaign with special promotions
on selected models. Our dealer network was also overhauled,
bringing on board more high-performing dealers in major cities to
support the new supply of Sorento vehicles manufactured at the
newly-completed Georgia production plant.
US demand is forecast to grow in 2010 as the economy improves
and carmakers offer generous incentives to boost sales.
Accordingly, Kia Motors will focus on promoting proven models
like the Soul and Forte, as well as ensuring a successful launch
of the all-new Sorento, which will be Kia’s first locally-produced
vehicle. Financial and sales support will be expanded, and
intensive marketing campaigns will be conducted to increase
trac at our top dealerships in the US.