KIA will end up in the number two slot in fleet sales at the end of 2022, having looked as if it was going to be top for some considerable time.
An unlikely position for the Korean car maker in normal times, but not when car supply for most OEMs was stymied, and Kia found itself in a position where there was plenty of Kia product.
It’s a position which John Hargreaves, Kia’s head of fleet and remarketing, acknowledges is usually improbable but something he’ll take for now.
He says that Kia will end up with a fleet market share of around 7.5% – up from 6.5% last year – and a strong order bank for 2023.
We had fewer supply challenges than other manufacturers during the year and we decided to keep going in all fleet channels. At the same time we were well-placed with electric cars and other powertrains, so we could respond to customers and provide what they required.
We also kept our dealer business programme going. We have 30+ who do it in a specialised way, although all Kia dealers do fleet. It has put us in a position that - when we started the year we were 30/70 fleet to retail and we've now gone 60/40 fleet to retail. So it’s been a strong year on fleet - a case of managing to get growth without distressing RVs.
Broker contribution as Kia programme up for review
John says the nine leasing brokers on the Kia programme have delivered 3500 vehicles during 2022.
The nine – previously 10 – brokers responsible for that are:
- AFL Group
- Balgores Leasing
- Central Contracts
- Fleet Alliance
- Gateway2Lease
- Jet Vehicle Finance
- Leasing Options
- Nationwide Vehicle Contracts
- Planet Leasing
John says he is looking for a 10th broker to give him and the Kia brand the full complement of brokers he thinks are required.
I think there is room for another broker to enter the Kia fleet programme, although I am currently reviewing our broker set up. We don’t want to pull out, let me make that clear, because we still see leasing brokers reaching areas of the market that we can’t.
The brokers we deal with are big professional companies. But we may want to scale back how much goes through each of those brokers because in an environment where the dealer is selling everything they can get, there has to be a good reason to give a financial uplift to a third party.
John says he is also looking at how much salary sacrifice business is going to change the balance of the fleet programme, but he says “We would not have an adverse view to brokers doing more salsac. We’re moving with the market.”
The Chinese threat and agency
With new brands entering the market from China – GWM Ora, Nio, BYD and a resurgent MG – does John see these as a threat to Kia’s market share?
We used to be a challenger brand and we are not any more. When you look at the pricing of these challenge cars we have moved beyond that. We have higher quality, a better range of cars and where we are now is looking up to the premium sector rather than down. Drivers might want a cheaper entry level to Kia but when you consider whole life costs and our expansive range of cars then we are in a different space to these new Chinese challenger brands.
Finally, John confirmed that Kia would not be going down the agency route. He said:
“We are committed to the traditional retailer model. Our view is that we have 192 people invested in the franchise. We’ve rebranded and we are insisting that dealer showrooms are rebranded and reorganised – so our view is a long term partnership with our retailers that does not include agency.”
Read our previous interview with Kia's John Hargreaves
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Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.
