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Kia Ready to Take Advantage of Growing Car Demand

Published: September 18, 2013 (Issue # 1778)



  • With the Russian market showing potential for growth, Kim says Kia is ready to meet demand with an affordable product lineup.
    Photo: Igor Tabakov / SPT

Kia Motors could invest inmaking more cars inRussia, where it is thethird best selling brand, if themarket rebounds andshoots past the3-million mark, theSouth Korean companys local chief said.

If overall sales ofnew vehicles climb to3.5 million units, it will be agood enough number toconsider committing money toa new assembly line, said Kim Seong Hwan, thecarmakers president inRussia.

All our studies are ready, he said ina rare interview.

Kim did not say when themarket might expand that much. Russia may surpass that level in2018 atbest, according toOleg Datskiv, chief executive ofmarket research portal Auto-Dealer.ru.

Fornow, sales are ona slippery slope. Customers are likely tobuy 2.8 million new vehicles this year, which would be afive-percent decline fromlast year, theAssociation ofEuropean Businesses predicted inJune.

Kia cars now roll off assembly lines attwo locations inRussia. One is aSt. Petersburg plant co-owned with sister company Hyundai Motors, which allotted Kia thecapacity tomanufacture 100,000 vehicles now theRio model, thethird bestselling car brand inRussia.

Kia can also order thesame amount ofcars froma Kaliningrad plant that belongs toAvtotor andnow cranks out nine models forthe brand.

TheKorean car giant aims tosell 200,000 cars locally this year, including imports, meaning it will not utilize its full Russian production capacity.

If Kias main office decides toadd local assembly lines, it may choose places other than St. Petersburg, Kim said.

Ina declining market, Kia is one ofa few brands that are going against thetide. It sold four percent more cars inthe first seven months ofthis year than inthe same period last year, according todata bythe Association ofEuropean Businesses inRussia.

Kim attributed therobust performance toautomobile designs byPeter Schreyer, aGerman designer known forhis work atAudi, who joined theKorean company in2006. Inaddition, Russians appreciate theyoung anddynamic spirit ofthe brand, Kim said.

With a seven percent market share, Kia trails behind thelocal auto industry champion AvtoVAZ andFrances Renault.

Inorder tocapitalize onRussias growing appetite forexpensive sedans, Kia brought its Quoris model tothe market in March thefirst time thecompany introduced aluxury car here, Kim said.

It is also taking proper note ofthe growing popularity ofsport utility vehicles ina country where anincreasing number ofpeople can afford them fordriving through snow andotherwise rough terrain. Kim estimated that theproportion ofSUV sales would bump to38 percent inabout three years fromits current 33 percent.

Kim agreed with acommonly held view that Russia could overtake Germany as thelargest European market forcars atsome point before theend ofthis decade. Russias relatively low number ofcar owners approximately half ofthe 500 vehicles per 1,000 people inEurope holds promise forgrowth. Also, more than half ofcars inthe country are older than 10 years, meaning theres a likelihood that owners will discard them fornew ones.

As alarger number ofcustomers are about tostart shopping forautomobiles, Kia is preparing tocounter therenewal ofthe affordable product lineup byAvtoVAZ andthe success ofRenault inthe low-cost segment with theLogan model, Kim said.

We are watching them closely, he said. We have plans athand torespond strongly tothe offers ofour competitors.





 


ALL ABOUT TOWN

Friday, Aug. 29


Park Pobedy will feature the sights and sounds of the world outside of Russia during the Open Art International Festival today. Taste foreign cuisine, learn how to make tea like the Chinese or relax in a hammock during the free event. Although entrance is free, you must register beforehand if you wish to attend.



Saturday, Aug. 30


Break out the tweed and channel your inner Englishman during the English Hunt Picnic this afternoon organized by the Bagmut stables from Krasny Bor in the Leningrad Oblast. Equestrian stunts, English archery and classic hunting fashion will all be available to visitors hoping to live like the characters in Downton Abbey if only for a day. Tickets for the event cost 7,900 rubles ($219.40).


Bookworms will have their chance to swap out well-read classics for something new for their bookshelves at Knigovorot, a free book exchange that will be held in the Yusupov Garden on Sadovaya Ulitsa today. Come for the chance to get a new book or take the opportunity to discuss the literary merits of your favorite authors with fellow fans.



Sunday, Aug. 31


The Neva Delta International Blues Festival wraps up this afternoon on Vasilevsky Island with a concert featuring not only some of Russias best blues bands but international stars as well. Admission is free for all three days of the festival, which begins on Aug. 29, and the shows starting at 5 p.m. each day.



Monday, Sept. 1


Today marks the beginning of Lermontov-Fest, a fall festival celebrating the life of one of Russias most remarkable poets who, in a fate eerily similar to Pushkins, was killed in a duel at the age of 26. Organized by the Lermontov Library System, the next several months will see art exhibitions, concerts and public lectures focusing on the Lermontovs short yet prolific career. Check the Lermontov Library Systems website for more details.



Tuesday, Sept. 2


Join expats and practice your Russian during the Russian Clubs weekly meetings every Tuesday night at 7:30 p.m. The club is free to participate in although you need to be a registered member of Couchsurfing.



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