By:
Aiman Rehan Khan
Madiha Haque
Muhammad Hasan Saeed
Zeerak Ahmed Ansari
Contents
Executive Summary ........................................................................................................................ 4
Kia MOTORS ................................................................................................................................. 5
Introduction ..................................................................................................................................... 5
Vision .......................................................................................................................................... 5
Management Philosophy............................................................................................................. 5
Core Values ................................................................................................................................. 6
United States ............................................................................................................................... 7
India ............................................................................................................................................ 7
Marketing .................................................................................................................................... 7
Brand Values ............................................................................................................................... 8
Relaunch in Pakistan ................................................................................................................... 8
Marketing Analysis ......................................................................................................................... 9
Target Market.............................................................................................................................. 9
Product line ................................................................................................................................. 9
Competitors Analysis ............................................................................................................ 10
Kia Picanto ................................................................................................................................ 10
Kia Grand Carnival ................................................................................................................... 10
Kia Sportage.............................................................................................................................. 11
Market Segment: ....................................................................................................................... 11
Needs, Growths, Trends:........................................................................................................... 11
Key Factors and Issues.............................................................................................................. 12
Kia as a Brand in Pakistan ............................................................................................................ 12
Brand Positioning: ................................................................................................................ 12
Product Positioning ............................................................................................................... 13
Positioning of Kia Grand Carnival ....................................................................................... 14
Positioning of Kia Sportage .................................................................................................. 14
Positioning of Kia Picanto .................................................................................................... 15
SWOT Analysis (Kia MOTORS) ................................................................................................. 15
Strengths: .............................................................................................................................. 15
Weakness: ............................................................................................................................. 15
Opportunities: ....................................................................................................................... 16
Threats: ................................................................................................................................. 16
Marketing Mix: ......................................................................................................................... 16
Promotions: ........................................................................................................................... 17
Product: ................................................................................................................................. 18
Price: ..................................................................................................................................... 19
Place: ..................................................................................................................................... 19
Conclusion .................................................................................................................................... 20
Recommendations ..................................................................................................................... 21
Executive Summary
This report contains a focused approach on Kia Motor’s re-launch in Pakistan. Being brought to
Pakistan again by the Lucky Group, Kia is now one of the first to establish its manufacturing
plant in Pakistan breaking the oligopoly of the Big 3. The mobility, design, product and capacity
are its firm foundations. This report encompasses their product portfolio, differentiation and
current market strategy. Our recommendations are centered around their biggest concern i.e.
establishing and retaining customer loyalty. With the current distressing state of Pakistan’s
automobile sector; Kia’s advent in the market is sure to be a game changer and when the market
reaches boom, Kia is sure to be among the front runner.
Kia MOTORS
Introduction
Kia Motors is one of the oldest manufacturers of motor vehicles and was founded in 1944 in South
Korea. It pioneered in bicycles and motorcycles. It has developed itself to be a powerful
corporation as a part of global Hyundai-Kia Automotive Group. At present, it has 14
manufacturing and assembly operations located in 8 countries worldwide which produce 1.4
million automobiles a year. Kia’s 300 distributors and dealers are situated around 172 countries to
deal with a network of selling and servicing of the vehicles. In its home country of South Korea,
it has Hwasung, Sohari and Kwangju facilities centers. The company has a dedicated research and
development center employing 8000 technicians. New technological advances are being developed
such as hydrogen fuel-cell vehicles for the future as well as state of the art technology is being
applied. Kia has designated 6% of the annual revenues on R&D as well as on its research centers
situated in USA, Germany and Japan.
Vision
Lifetime Partner in Automobiles and Beyond.
Management Philosophy
Unlimited Sense of Responsibility / Realization of Possibilities / Respect for Mankind
Core Values
Brief History
Kia was founded in 1944 in the name of Kyungsung Precision Industry. Initially steel tubing and
bicycle parts were being manufactured. The first bicycle known as Sumchully was created in 1951.
A year later the name of the company was changed to Kia industries.
In 1957, they started manufacturing small motorcycles which were Honda-licensed. They also put
their hands-on Mazda-licensed trucks in 1962. Their first automotive plant was opened in 1973.
Small Brisa cars were built in the Sohari Plant.
Production eventually halted when consolidation of the industry was enforced by a military
dictator Chun Doo-Hwan. During this time, Kia had to give up passenger cars to focus on light
truck manufacturing.
Kia was producing 95,000 vehicles in 1985. However, in 1986 after the shutdown that number
reached down to just 26 cars. Kia joined Ford motors to get back into automotive industry. They
worked to manufacture Mazda Vehicles to increase sales in South Korea.
United States
In 1992, Kia Motors moved to America. Dealerships located in Portland; Oregon were the first
ones to sell the first automobiles. The company gradually extended their operations to different
states one at a time. By 1995, the company had grown more than a hundred dealerships across 30
states. Approximately more than 24,000 vehicles were sold.
In 1997, Kia declared bankruptcy due to the Asian financial crisis. Hyundai and Kia reached an
agreement a year later to diversify their operations by creating a partnership with each other. 51%
of Kia was taken by Hyundai. Ford Motor Company was outbid by Hyundai to create this deal. In
exchange, Kia holds 22 subsidiaries from Hyundai. At the end of 2006, Kia Motors opened a
manufacturing plant in West Point, Georgia with $1 billion investment. In 2014, Pope Francis rode
in one of Kia’s compact vehicles in Kia Soul. This drew vast attention all over the world.
India
The company has entered the Indian market in July 2019 with their 'Made for India' SUV- SP2
Concept now announced as the global mid-sized SUV Kia Seltos. The company has built a
production facility on a Greenfield land in Anantpur district, Andhra Pradesh near Penukonda.
The annual production capacity is 300,000 units. Kia Motors has appointed Kookhyun Shim as
MD & CEO for its Indian arm. In his new role, Shim will be responsible for leading the carmaker's
expansion in the Indian market. Shim will play a leading role in ensuring KMI's projected timeline
and schedule of operations is achieved. He also oversaw the construction of Kia Motor's first
manufacturing facility in India, to help strengthen the company's position in the fifth largest global
automotive market. Kia has committed investments to the tune of $1.1 billion to develop
operations in India including investing in a network of over 250 customer touchpoints that include
service, sales and spares establishments.
Marketing
Kia’s main motive is to keep its consumers happy and satisfied. Initially, Kia was considered to
be an affordable brand, but they changed the minds of their consumers through their marketing.
Kia most memorable campaigns took place in Kia Soul Shuffle. The company also invest heavily
invested into sports sponsorships as well such as NBC’s Sunday night Football and the 2014 FIFA
World Cup.
Brand Values
Kia Motors has seen a steady increase in its brand value since its entry into the top 100 global
brands list in 2012. As a result, the value of brand this year marked US$ 6.9 billion, up by 4%
from the previous year. This allowed the company to enter the top 71 list of the global brands,
which is a tremendous attainment.
Starting from 2005, the company has been engaged in enhancing the brand power and
improvement of the company reputation through the brand slogan of “The Power to Surprise,”
with continued efforts for innovation in product development, communication, sales, services, and
other customer-related activities.
Relaunch in Pakistan
Dewan Mushtaq Group entered the automobile industry by diversifying its business operations in
2000. In December 1998, Dewan Farooqui Motors Limited signed Technical License Agreements
with Hyundai Motor Company and Kia Motors Corporation to be the sole disturber of Kia Vehicles
in Pakistan. Kia Motors stopped its production in Pakistan in 2007.
In 2017, the Ministry of Industry and Production initiated an agreement with Lucky Motors for
producing light commercial and passenger vehicles. Due to the incentive-based policy many other
entrants invested in the automobile industry in Pakistan. These brands include Hyundai,
Volkswagen, Renault, Nissan etc.
From 2018, Kia collaborated with Lucky
Cement to set manufacturing plants in
Pakistan. Initially, the Kia Grand
Carnival and Kia Frontier k2700 were
launched through Kia Cars. Kia is
predicted to launch new models of their
cars in Pakistan. The target is to attain a
good market share in the SUV sector.
In the next few years, competition in the
automobile industry is expected to
accelerate due to rise in the demand of
cars. Better quality vehicles must be provided in order to stay in the market and fight competition.
The consumers now have more options to choose from for the first time. This has changed the
entire outlook of the automobile industry in Pakistan and it will keep evolving with years to come.
Marketing Analysis
Target Market
The target market of Kia Motors is quite a delicate one. When launching Kia in Pakistan, they set
their sights on the customer in SEC A & B+ segment. They realized the gap that persisted between
the car users of a Honda Civic/ City and an SUV such as Fortuner and targeted that market. This
target market has two types of car users; one which is very price conscious and the other which
has the buying power for a heavy-duty car but has to be pulled in the Kia portfolio. Currently their
portfolio comprises of Picanto, Grand Carnival and Sportage. Kia Motors is generally targeting
the price conscious customers and the mid-tier segment of Pakistani automobile users.
Product line
The reputation of Kia vehicles in Pakistan considering the experiences in both the previous
occasions is shaky. Kia Spectra which used to sell like hot cakes when launched in 2001 is
currently considered as the most undesirable vehicle and has little or no resale. Same goes for other
Kia branded vehicles in Pakistan.
However internationally, Hyundai & Kia’s success has come in leaps and bounds over the past
decade and currently produce much better vehicles compared to the likes of what people of
Pakistan are used to. From a vast array of quality vehicles, we have picked the models that are
relevant to the Pakistani market. Kia Motors decided to enter the automotive market of Pakistan
with limited products. Their product line consists of three of cars:
i.
Kia Picanto
ii.
Kia Grand Carnival
iii.
Kia Sportage
Competitors Analysis
Kia Picanto
Kia Picanto’s main competition is Suzuki’s popularly known ‘mom cars’ i.e. Suzuki Cultus,
Suzuki Alto and Suzuki Wagon R. Picanto is a very versatile car with a price tag south of PKR
2 Million. Tearing away from the monopoly of Suzuki, who is the only other car manufacturer
in the country which produces 1,000 CC cars under this budget, Picanto is luxury car offered
at a very competitive price. The quality it provides is unmatched along with good fuel mileage
and unmatchable amenities.
Kia Grand Carnival
This aerodynamic 11-seater currently does not a specific competitor in Pakistan. It is the crossover
of an MPV and SUV. With state-of-the-art infotainment features and car health checks, the Grand
Carnival is unparalleled. A hybrid of two car segments, this car offers the best of both worlds
Kia Sportage
Sportage is Kia’s main star. Its main competitors are Honda Vezel, Suzuki Vitara, Honda BRV
and Nissan Juke. Though Kia Sportage is a compact luxury alternate for SUV like Fortuner, these
cars also cater to similar if not same target market.
Market Segment:
Kia’s market segment is based on demographics. With respect to demographics, we focus on
income groups and age. Kia Picanto is targeted more towards SEC B (the price conscious group).
It is also ideal as the second family car. This segment is perhaps Suzuki’s core strength as it
currently has the majority market share. Via strategic pricing and luxurious amenities, this car
forecasts a bigger market share in the near future. Grand Carnival and Sportage both target for
SEC A customers.
Needs, Growths, Trends:
Kia Motors was launched in Pakistan to cater to the growing gap of affordable luxury vehicles in
Pakistan. Supporting their slogan, “The Power to Surprise”, Kia is targeting the SEC A, B+ & B
segment which has mass potential volume. Their cars are now raising the standard for other car
manufacturers to step up their game.
Even though the market is down, there is a projected long-term rise and Kia along with its versatile
range of cars is set to gain solid footing within the Pakistani automobile industry. Due to its
competitive pricing and services, it is here to stay. With the government supporting more foreign
companies to take root in Pakistan and the wide market, it is projected that car sales will slowly
but gradually pick up and Kia will gain a competitive advantage over it.
Key Factors and Issues
One of the key factors is the present state of the
Pakistan’s economy where up to 4,000 members of the
workforce have been fired and jobs of around 32,000
workers of the vendors of the automobile sector also
hang in the balance. Inventories of Honda and Toyota
are piling up due to regular production and marginal
corresponding sales. There is a huge crunch in the
market and presently there is a grim turnover which will
take up to 6 months to normalize. Though Kia is market
competitive this is an alarming issue. Due to rising inflation, Picanto is now very closely priced to
Cultus and for a price sensitive customer that is a very delicate matter. There needs to be a more
feasible solution. For the target market of Sportage, the consumer has the capacity to buy even
more exclusive alternatives; convincing that customer and changing their mindset and altogether
alter their perception of Kia as a branded luxury car will require serious time and effort. They will
need a more persuasive integrated marketing campaign. Although their free test drives and
dealerships are removing a lot of reservations from potential customer’s minds, they need to
establish and retain a loyal customer base.
Kia as a Brand in Pakistan
Brand Positioning:
The major objective of brand positioning is how the target market of Kia differentiates the brand
from its competitors. This is to be kept in consideration that Kia is an automobile manufacturer
which assembles different types of automobiles targeting different segmentations. Kia’s slogan is
“The Power to Surprise”, Kia offers top of the line features in its cars within an affordable price
with the best build quality. This is the brand positioning of Lucky Kia Motors to provide the best
quality and feature rich automobile in an affordable price “Affordable Luxury” and this is how Kia
has the power to surprise its customers.
Kia website states that:
“Kia will show you the power to surprise with dynamic and exciting experiences that go
beyond your expectations”.
Since 2005, Kia has been working hard in improving the brand power and enhancement of the
company’s reputation through the brand slogan of “The Power to Surprise,” with constant efforts
for innovation in communication, product development, sales, services, and other customer related
activities.
Kia internationally holds 71st position in Interbrand Best Global Brand 2018 with a brand equity
of $6.9 Billion. Interbrand is a global brand consultancy firm which annually produces a list of the
top brand on the bases of their brand equity.
In Pakistan, the brand image of Kia as perceived by target audience is substantially different as of
the international market due to the poor performance of the brand in 1990’s and early 2000’s after
which the brand exited the Pakistani market. With the re-launch of Kia with this repositioning in
Pakistan, they can capture the market share with strong brand communication supported feature
rich product line and exceptional service.
Product Positioning
Kia has multiple products positioned to cater different market segments, currently Kia has the
following products available for the Pakistani market:

Kia Grand Carnival

Kia Sportage

Kia Picanto
Positioning of Kia Grand Carnival
Kia Grand Carnival is a Multi-Purpose
Vehicle (MPV), the only luxury
positioned MPV assembled in Pakistan.
Suzuki APV is the only product in
Pakistan which comes to comparison
with Kia offering but it is not a luxury
product. Kia has tried to maintain a
differentiated
product
image.
Kia
Grand Carnival comes with 4 airbags, a V6 3.4L Engine and all the premium features for price of
Rs 4, 899,000 (4.9 Million). A Toyota or Honda vehicle of similar specification would cost for no
less than Rs.10 Million. Kia Grand Carnival is priced high enough to be considered premium and
low enough for be affordable hence it has established a new product segment of “Affordable
Premium”.
Positioning of Kia Sportage
Kia Sportage is the first locally assembled car by
Kia, it is a Sport Utility Vehicle priced at Rs 5.4
Million. It is traditionally targeted for young upbeat
professionals. The product features are similar to
that of a premium vehicle but is priced much lower
for its category. This is a car for young professional
with a nuclear family and enjoy the experience of
long drives with the comfort of a luxury vehicle. Kia
has positioned Sportage in the price gap that had always remains in Pakistani automobile market
the price gap between luxury cars like Honda Civic and SUVs like Toyota Hilux or Fortuner.
Positioning of Kia Picanto
Kia Picanto is a mid-range budget car introduced by Kia, although its booking has been started in
mid of October, but they have not made any TVC’s or pushed it advertising via digital channels.
Therefore, an exact positioning cannot be determined through
the attributes or personality of the product since this has not
been communicated. In terms of price and feature of the
product, Kia Picanto is priced at par with its main competitor
Suzuki Cultus with is of Rs 1,975,000 whereas Kia Picanto is
priced at Rs 1,999,000 with features far superior of that of Suzuki Cultus.
SWOT Analysis (Kia MOTORS)
Strengths:

Feature rich product offerings, a lacking in its competitors, e.g. Kia Picanto’s additional features
are sophisticated as compared to its direct competitor Suzuki Cultus and Suzuki Wagon R.

Competitive pricing of products, Kia’s products are priced at par or slightly higher than its
competitors although being superior in quality and features, e.g. Kia Picanto is priced at
Rs 1,999,000 whereas Suzuki Cultus is priced at Rs 1, 975,000.

Kia has filled a market gap that had always been present in Pakistani automobile market up till
now; price-tier range of Rs 4 to 8 million, by introducing Kia Sportage.

Kia provides the longest period of warranty of 4 years or 100,000 kilometers free of additional cost,
which no other automobile assembler provides in Pakistan.

Pakistani Automobile market has been an oligopoly for the last 15 years after the fall of the Dewan
Mushtaq Group and the market ever since been dominated by Suzuki, Toyota, and Honda. With
Kia entrance to the market, it will serve the verity seeking behavior of the consumers.

Kia Brand positioning is relatively revolutionary as no other automobile assembler worked on their
branding as there was an oligopoly of three companies serving different segments.
Weakness:

Kia has a negative brand perception in Pakistan due to bad past experiences being previously
launched by Tawaaqal Group in 1990’s and Dewan Mushtaq Group (DMG) in 2000’s.

Kia was limited by product offering which are suitable of Pakistani market. e.g. Kia does not
have KEI cars (ultra-small budget cars) like Suzuki’s Auto 660 cc which are gaining popularity
due to increasing fuel and car prices

Price elasticity, Kia cars prices are highly dependent on the Rupee Dollar parity as majority of
parts are imported.

Kia has certain tax exemptions under Green Field Investment regime for two years, their prices
may not remain as competitive once the exemptions are withdrawn.
Opportunities:

Pakistan automobile market has been an oligopoly, Kia can satisfy the verity seeking behavior in
the automobile consumer market with is differential market offering.

Pakistan has one of the lowest per capita car ratios and has high room for growth.

CPEC with increase the business activity in the country resulting in higher demand for automobiles
in corporate, individual and government sectors.

Kia can increase the localization of automobile parts reducing costs of production
Threats:

Higher Dollar Rupee parity may influence the pricing strategy of the company, recent depreciation
of Rupee has increased the prices of cars in Pakistan by 43% whereas sales are down by 66%.

New entrants in automobile market may increase the competition like Hyundai, Changan and
DFSK amidst low sales due to high prices.

Consumer buying preferences might not change quickly although Kia has better products as high
involvement purchase decisions involves other factors that Kia cannot control in the short run, e.g.
Consumer give high preference in cars that after a usage of few years sell at a relatively good price
but since Kia has recently came to the market there is no way for the customer to evaluate Kia on
this basis.
Marketing Mix:
Kia with its outstanding product quality and design has relaunched in Pakistan but due to the
previous unfavorable experience of the customer the brand perception of the customers is very
poor, for it to improve Kia must utilize the marketing mix to its fullest to communicated to the
target audience.
Promotions:
To
increase
the
brand
awareness Kia has made few
TVC only for Kia Sportage,
which are being shown on all
leading television channels.
The strategy of Kia is to
promote Kia Sportage as the
main product to boost the
image of the company not
only because it is the most
luxurious
product
it
has
launched in Pakistan which
corresponds with their brand
image as a “affordable luxury” but also the innovators in the Pakistani luxury car market will adopt
the product. This will increase the visibility of the product on the roads. Kia has also started to
advertise its products on the digital media in such a way that has never been done before in the
Pakistani automobile sectors. Not only its product advertisement can be seen on the different
websites through Google AdSense, they have started to Micro-Market on their Facebook page for
example, when there was the rainy
season in Karachi, they posted
images encouraging its users and
target audience to experience their
product to take it for a long drive.
Furthermore, they have developed
social media strategy to engage
every individual who likes or
comments on their Facebook page
which can be seen in the second
image. Kia is trying to entre an
oligopoly
through
automobile
a
well
market
strategized
marketing plan. Although this type of competition has to been seen before. Kia should maintain
its communication strategy consistent so that it could have a maximum outreach.
Product:
Kia products come with the latest features which other
of its competitors lack, it is done with the image in
mind to make its customers perceive that Kia is
actually a premium car brand in order to build its brand
equity. The previously older cars brand was constantly
criticized that their products lacked the build quality as
of the international market, but the shoppers did not
have any other alternative, with the launch of Kia they
provide the best build quality as compared to other car
brands. The brand team at Kia motors are so confident
of their deliverability of their promise of quality that if the customer will experience the product
at their display centers that customer will make the purchase decision then & there. Kia display
and service center are designed to be modern and luxurious in sync with the brand image. Kia also
offers 4 years warranty on its products which also communicates to the customers the confidence
of the producer on the quality of the product.
Price:
Kia products are priced very competitively in regard to its competitors.
Kia can maintain its affordable luxury pricing strategy; it will capture the Pakistani automobile
market as majority of the customers are highly price conscious.
Place:
Placement of automobile is significantly different and other consumable products. Kia
automobile dealerships are present in all major cities in Pakistan on high traffic upscale
locations.
Kia is still in the process of adding more locations within the existing cities and also other cities
of Pakistan as well.
Conclusion
Pakistan Automobile market has always been oligopoly with the resent automobile policy new
entrants have introduced their brands. Kia with its distant differentiation can capture the market
share. They have revolutionized how Pakistani automobile marketed their products. But a lot more
has to be done to make the Kia a success. Kia would consistently deliver the value that it has been
comminuting to its customer with a tight quality control system. Kia Lucky Motors faces trust
issues with its customers, it had to re-communicate itself as a brand – coming back to Pakistan.
Consumers face trouble believing that Kia won’t leave again as it did in the past.
Kia Motors is a globally recognized brand which is why it has a decent fan following and people
are intrigued, while repositioning itself in Pakistan Kia became more consumer oriented and it’s
filling the market gap between high end tier and mid-level tier. Kia products have an edge over
local product.
Recommendations
Kia Lucky Motors is more experience driven than any other automobile brand in Pakistan. They
offer high-end quality and a little bit of value-added surprise, so far, they have done a great job in
grabbing the attention of the consumer market, in order to keep their customer base strong, they
need to keep innovating.
Currently they have a limited number of products, they quickly need to expand the product line,
as the competitors’ production is temporarily shut down. This economy crisis can be bit of make
or break for them. If they can actively launch other competitively priced cars as Picanto in this
time frame it will give them the boost they require. They can also collaborate with banks and
MNCs for discounted payment terms (on loans). They need to increase visibility and actively
engage with the consumers. They need more billboards and TVCs with airtime in post prime time
period. Their dealerships are already at visible and feasible locations however they need flashier
print media and financially incentivized benefits to lure the customer in. Endorsements by
Pakwheels and other reputable entities would bump sales. Their presence at the Pakistan Auto
Show provided a natural platform for organic buzz for the reveal of Sportage and it showed not
only a spike in brand loyalty but the sentiments that Kia was here to stay. Their marketing tactics
are centered around their slogan of ‘The Power to Surprise’ and activations as such could mean
well in the long run. They should also target informal car enthusiast groups and engage in previous
activations with celebrity endorsements. As they have international collaboration with Korean
artists for KiaonBeat, they should take in local artists for premium content. They can then tap into
the influencers and stretch into the early motivators market which will gradually solve their loyalty
establishment query. However, to retain the customer, their after sales and customer care will be
the key to long term growth.
References
Primary Sources:
Product Analysis Miss Najia (Sportage) and Arish Adi Kapadia (Picanto)
Secondary Sources:
Pak wheels,
Kia-Lucky Motors,
Kia Motors.