Kia Motors Corp issued the following press release which is an update to our previous news story on the first production model:
With the introduction of its new ’Tian Li Ma’ (or Cheolima) model in Beijing on December 2, Kia becomes the first Korean carmaker to produce and sell passenger cars in China
– Planning to increase to 300,000 cars a year from its initial 50,000, Kia aims to produce the best-selling car in China with this model case of Korea-China economic cooperation: a 76% ratio of localization at the start in joint operation with a local corporation
Kia Motors (CEO: Mong-koo Chung) has become the first Korean carmaker to produce and sell passenger cars in China. — Hyundai's expansion into India.
On December 2, Dongfeng Yueda Kia Motors, a joint venture over which Kia controls management rights, held a session to introduce its new vehicle model Tian Li Ma (literally meaning a ’strong stallion that can gallop 400km a day’). The car was unveiled to a crowd of 400 people gathered at the Beijing Hotel in Beijing, China, including invited guests and government officials. Thus began in earnest Kia’s efforts to advance into the Chinese market for passenger cars.
“Tian Li Ma” was developed by Kia to suit the rapidly growing Chinese auto-market for small and medium-sized passenger cars. Before going ahead with the mass production of 1,300cc vehicles from July 2003, Kia plans to begin with the production and sales of 1,600cc models. Tian Li Ma is a genuine sedan-type passenger car in the style favored by the Chinese, with the output and durability of its major driving parts – such as engine and transmission – comparing favorably with any competitor in the same category. Its interior also boasts state-of-the-art quality as a deluxe mid-sized car, along with 16 basic components including an air-conditioner, CDP, ABS, leather seats and airbag. Yet despite this excellence in performance and basic specifications, it is still extremely price-competitive (approximately 100,000 Yuan).
Dongfeng Yueda Kia Motors says that its new passenger car is exactly the sort of vehicle that is most coveted by their target Chinese market. Their potential customers identify with the dynamic and sporty image of a luxurious interior and grandiose design, as gleaned from a pre-market survey carried out since last March among car experts, car owners and those who plan to purchase cars in China. — Kia's European manufacturing strategy.
Based on the results of this survey, the joint venture plans to target individuals who are self-employed, high-ranking employees in private firms and professionals in their 30s to 50s. It will also engage in large-scale marketing activities through nation-wide road shows until early 2003, generating a whirlwind of publicity for ’Tian Li Ma’. The goal is to sell two thousand ’Tian Li Ma’s within a single month (December), so that the vehicle may join the ranks of bestseller cars within a short period of time, with an eye to occupying 5% of the entire passenger car market and 15% of the small car market in China with sales of 50,000.
Dongfeng Yueda Kia Motors restructured its sales network system, expanding it to 10 local chapters from the existing five, and directed each of the 61 sales agents operating under local chapters to expertly carry out the functions of sales, after-sales service and supply of inventory parts.
At the December 2 session to introduce the newly-developed car, President Zheng Da Yu(鄭 達 玉) of Dongfeng Yueda Kia Motors said in a congratulatory speech, ’Tian Li Ma is an epoch-making passenger vehicle that boasts the highest possible competitiveness among all small and medium-sized cars in China. It also compares favorably with any competitor in the same category in terms of quality standards, and enhanced various specifications to meet the requirements of Chinese customers. We are sure that ’Tian Li Ma’ will create a whirlwind of popularity in China.’ — new Sportage model details.
He also pointed out the significance of ’Tian Li Ma’ being the first officially approved Korean passenger car made in China, as a result of Kia’s strenuous efforts to advance into the Chinese market. It is predicted that the Korean-Chinese joint venture will soon join the ranks of the leading carmakers in China, based on a system for annual production and sales of 300,000 cars.
Apart from encouraging a total of 29 parts-supply subcontractors to join its efforts to advance into the Chinese market, Kia also plans to foster 14 local parts suppliers. At this inceptive stage its ratio of localization is hovering as high as 76%, thus allowing Kia to greatly reduce production costs. The joint venture is appraised in China as a model case of Korea-China economic cooperation.
Kia produced its ’Pride’ model through the Yueda-Kia Motor Corporation, Korea’s first joint carmaker venture in China, and then signed a joint venture contract in March 2002 to form Dongfeng-Yueda-Kia Motor Corporation with Dongfeng Motor Corporation (the third largest carmaker in China), for the production of officially certified passenger cars.
