Currently reading: Kia: lockdown making it easier to hit CO2 targets
European CEO Emilio Herrera says the South Korean firm is in a relatively strong position, compared to its rivals, during the coronavirus pandemic
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4 mins read
12 June 2020

Kia’s business has been less negatively affected than its competitors by the pandemic, according to the firm. In fact, Kia believes it has actually benefited in terms of meeting the EU’s tough new fleet average CO2 emissions targets.

“We think we will be less impacted than the industry in general,” Kia’s chief operating officer for Europe, Emilio Herrera, told Autocar. “We saw that in the first quarter: the market was down 26% in Europe, but Kia was down 14.5%. Consequently, we increased our market share. Usually when there’s a crisis, Kia behaves better than its major competitors.”

Herrera cites the Korean brand’s positioning as “a more rational choice” – alongside its relative value and the peace of mind afforded by its seven-year warranty – to explain its relative success in this time of difficulty for most companies.

Hitting CO2 targets earlier

What has still been a steep reduction in sales is beneficial to Kia’s corporate average fleet emissions, which must fall to around 95g/km (before brand-specific adjustment) by the end of 2020 to avoid fines.

Herrera said: “In the initial plan we had, we were supposed to reach the CO2 target by the end of November. Our revised plan includes less units, because of what we lost in March and April.

“With the new revised volume we have, we will achieve the CO2 number at the end of August, because the number of ICE vehicles sold has reduced dramatically but [sales of] plug-in hybrid and electric vehicles haven’t.”

Looking ahead to a recovery

Herrera acknowledged that it will be “very difficult” to recover lost sales as a result of lockdowns “without strong government plans to support the automotive industry”.

However, he referred to a survey completed in China after restrictions were lifted that points to an increase in the use of private cars, suggesting “people will feel safer in their cars, so usage will increase”.

Herrera continued: “Will that necessarily translate into more purchases of new cars? Maybe, but also of used cars. If there’s a good combination of that and government support, we might see a strong recovery.”

Increased EV sales

Another factor benefiting Kia is increased supply of EVs. Waiting times for the e-Niro and Soul EV had been long, but the issue is now less acute.

A spokesperson claimed that Kia sold more EVs in the UK during February and March than in the entirety of 2019 and intends to deliver all of those by the third quarter of this year.

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However, Herrera claimed that, in general, the volume of EV batteries supplied to Europe won’t increase this year. “It will improve in the next few years,” he said, “because we’re making the necessary agreements to ensure the supply.”

The first EV based on a new, dedicated architecture shared with sister brand Hyundai will be a production version of last year’s Imagine by Kia concept. A performance-focused four-door blending traditional saloon and crossover styling influences, it will arrive in 2021.

“A shelf life to diesel engines”

Kia also expects the number of diesel cars it offers to be “really minimal” by 2025, with the fuel being reserved for the brand’s largest European models – for which high torque and towing capability are necessities.

“There is a shelf life to diesel engines,” said Herrera. “We see now by introducing the mild-hybrid petrol cars, the benefits of diesel [in smaller cars] disappears. The Sorento is a big car, it’s often used for towing, and you can’t solve the problem with a [petrol] mild hybrid.”

Herrera expects Kia to go 100% electric in the second half of this decade, but he stressed that the anticipated growth of EV sales will only come where governments are actively involved in promoting them.

“We clearly see the markets that have support from government, either by grants or reduced taxation, are the markets where EV demands are high,” he said. “So, there’s that, and we as a manufacturer are pushing because of the CO2 targets. If those two things are combined, we can be very successful in eliminating the ICE cars we have.”

The new Sorento is set to arrive in the UK this autumn. Buyers will have the choice of a 199bhp 2.2-litre diesel, a 227bhp petrol hybrid and, shortly after launch, a 261bhp plug-in hybrid.

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Comments
3

12 June 2020

Kia, with most manufacturing in South Korea, is not so affected as European brands that had to shut their factories.  

So no, it's not about a sudden sharp rise in the appeal of Kia, it's simply because they have still been able to produce cars when others have stopped.

12 June 2020
South Korea was also hit by covid and I am sure it was reported on here that factories closed as per European ones, I may be wrong though. They also have a European factory.

12 June 2020

Every cloud has a sliver lining... 

But they're still pushing for government (taxpayer) support.

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