Today's domestic auto market is undergoing the dual baptism of consumption upgrading and consumer rejuvenation, electrification and automatic driving. Under this rushing tide, some car brands have retreated, while some external forces have entered the market.
As a typical representative of Korean cars, Kia Motors has achieved gratifying results in brand building, new car listing, revenue promotion, operation management and other aspects in 2021, after the brand renewal at the beginning of the year and the corporate restructuring at the end of the year, which has initially enhanced the kia brand image.
However, at a media briefing in Shanghai, Kia executives revealed that from 2022, models below 100,000 yuan will be gradually discontinued. So what was Kia's intention in doing this?
Car watchers will analyze and comment on each of the two dimensions of brand and market.
Return to the mainstream joint venture camp
As we all know, in the domestic car market, there have always been two camps, that is, joint venture brands and independent brands. A few years ago, the more pragmatic Dongfeng Yueda Kia at that time, wandering in the middle of the joint venture and independence, using its own joint venture brand advantages, as well as affordable prices close to independence, in the market is also booming, the annual sales of nearly 800,000 vehicles, can be described as a moment.
However, in recent years, independent brands have been on the rise, especially in terms of appearance and intelligent network configuration, which has also caused a lot of pressure on Kia. Coupled with the fact that consumers are getting younger and the trend of consumption upgrading is obvious, Kia has also begun to rebrand.
Starting in 2021, Kia began to rebrand, and this rebranding can be seen from the two major auto shows. At the 2021 Shanghai Auto Show, Kia released a new LOGO, a "customer-centric" brand concept and brand purpose, launched an Experience New Kia national test drive activity, expanded the user brand experience touchpoints, and let more Chinese consumers recognize the different new Kia. In addition, in response to the Chinese government's dual-carbon strategy, at the Guangzhou Auto Show, Kia released its corporate vision of "Sustainable Mobility Solution Provider" and "2045 Carbon Neutrality Strategy" in China, committing to becoming a sustainable mobility brand.
In fact, Kia itself is an international mainstream car brand.
Looking back at the history of the Kia brand, we can find that Kia was founded in 1944, is the first automobile manufacturer in Korean history, is a regular customer on the list of the world's top 500 and the world's top 100 most valuable brands, and has always adhered to "mobile" as the core to serve people's travel. From the departure of two-wheeled vehicles to one of the world's top ten automobile manufacturers, Kia has continuously promoted the development of the field of mobility, continued to make breakthroughs, boldly created, and launched many star models that have swept the world, which can be called a representative of technical strength, whether it is in the traditional internal combustion engine, chassis, transmission, or new energy technologies such as oil-electric hybrid, plug-in hybrid, pure electric, hydrogen energy, or in the field of intelligence, there are deep technical accumulations.
Judging from the global ranking of automobile groups, Kia is also quite proud. Hyundai Kia is the world's top 5 automotive group. In 2021, Hyundai Kia Group sold 6.668 million units worldwide, ranking third in the world. Among them, Kia's global sales volume was 2,777,056 units, an increase of 6.5% year-on-year. In May 2021, Kia sold more than 50 million yuan in the global market and won the trust of more than 50 million consumers worldwide.
From the perspective of R & D and production layout, Kia is also remarkable. Kia has an extensive R&D and design network around the world, with more than 10 plants in six countries and an annual production capacity of 3.7 million vehicles. Stable R&D and production system and leading technical background ensure that each kia product can have ingenuity and excellent quality, and achieve the perfect combination of innovative design and extraordinary value. In just a few years, Kia has expanded to more than 5,000 dealerships in more than 180 countries, providing consumers around the world with high-value passenger cars and innovative mobility products and services.
Therefore, Kia is back in the mainstream camp of joint ventures. To this end, Kia will rebrand in the following areas.
The first is to launch a new company name. On the eve of the 2022 Beijing Auto Show, Kia will unveil a new joint venture brand name.
The second is to integrate into the global system and increase investment in the Chinese market. Kia will pay more attention to the needs of Chinese consumers, the combination of globalization and localization, Yancheng will become an important hub for Kia's new energy production and overseas exports.
The third is to strengthen brand building and make new Kia deeply rooted in the hearts of the people. Kia will set up a marketing headquarters to strengthen the online and offline integrated marketing of the target groups of the MZ generation, and more comprehensively display the new Kia to consumers through brand days and cross-border marketing such as league of legends and Australian Open according to user preferences and life scenarios.
The fourth is to make management efficient and form an efficient organizational system. Promote or introduce talents to enhance the competitiveness of the organization, establish an efficient and agile sales system, cultivate first-class teams, and improve sales and service capabilities.
Through the above measures, Kia will greatly enhance the brand's awareness and reputation, and will also return to the mainstream joint venture camp.
Enter the mainstream consumer market
Once the rebranding is successful and the brand positioning is realized, then Kia will begin to plan the next step and enter the mainstream consumer market.
What is entering the mainstream consumer market of automobiles? That is, through the study and judgment of the trend of consumption upgrading, research and development in line with the consumption demands of young consumers, and sell products that meet the experience habits of young consumers.
From Kia's new Jawa, perhaps Kia sees the direction of development. The new Jawa is the only automotive product in Kia that sells for more than 300,000 yuan. However, it is also now the hottest and highest-selling automotive product on the market.
In 2021, Kia will continue to adjust its product structure and accelerate its mid- and high-end product layout in China through the listing of the Smart Run Ace and the fourth-generation Jawa of the "Global Flagship MPV". It is worth mentioning that as Kia's first model in China with a price of more than 300,000 yuan, since its listing in September, the sales volume of the fourth generation of Jawa in first-tier and new first-tier cities has reached 47.5%. Driven by the fourth generation of Star models such as Jiahua, Zhipao Ace, K5 and so on, in December 2021, The average MSRP of Kia reached 141,300 yuan, compared with 108,400 yuan in 2019, an increase of 32,900 yuan, improving the revenue of new cars, changing the perception of the Kia brand in the hearts of Chinese consumers, and laying the foundation for the increase in brand premium.
To this end, from 2022, Kia will gradually stop the production of less than 100,000 yuan of automotive products, at the same time, will launch a new flagship SUV Sportage and K3 mid-term modification model, the introduction of Sportage's HEV hybrid model, from next year, the introduction of at least 1 electric vehicle per year, to provide Chinese consumers with diversified mobility solutions.
At the same time, Kia will rationalize its operations and work with dealers. Focus on revenue improvement to carry out operational work, continue to promote the "retail-centric" business policy, formulate reasonable operating indicators, and achieve sustainable development.
Here, the focus should be on reviewing The achievements of Gena in dealer relations in 2021.
In 2021, Kia adheres to the "retail-centric" sales method, cancels the assessment of pick-up indicators, formulates reasonable retail indicators, and continuously optimizes business policies, improving the profitability of dealers and enhancing the competitiveness of dealers in the regional market. The inventory of dealers has been reduced from 46,000 units at the end of 2020 to 19,500 units at the end of 2021, and the operating conditions have been well improved, laying the foundation for meeting future market challenges.
By adjusting the product structure and consolidating the relationship with distributors, Kia has only one purpose: to enter the mainstream consumer market.
Write at the end:
There is no doubt that rebranding and product restructuring are a wise move for Kia to deal with the Chinese auto market. The suspension of production and sale of automobile products of less than 100,000 yuan from 2022 is a clear signal of this initiative.
With Kia's ranking in the global automotive market and R&D and production layout, coupled with the brand renewal and the introduction of global strategic models and new energy models, automotive observers firmly believe that Kia will be able to return to the mainstream joint venture brand ranks and enter the mainstream consumer market with its head held high.
(Author: Chen Xi)