Managing change is a challenge that every distributor faces.
With the current global economic gloom already affecting consumer
purchasing in many markets throughout the world, this month's Kia Plaza
takes a closer look at Kia Motors Saudi
Arabia and explores how it turned change into opportunity.
Kia
Saudi Arabia underwent its third distributor change in as many years in
April this year. The mood in the market place, however, was far from
ideal. Saudi customers are accustomed to stable, familyowned car
distributors, and rumors
abounded that this new change signaled
Kia's exit from the Kingdom; customers were nervous about their
existing warranties and the continuation of after sales support.
Coupled
with a daunting target of increasing annual sales by 250% to 20,000
units, the outlook for a successful year appeared shaky.
It's a
cliché, of course, but change often presents opportunities. According
to Rudy Girgis, Chief Operating Officer of Kia Motors Saudi Arabia,
this was keenly recognized by the new ownership both before and after
the takeover. He said, “The takeover presented an opportunity to not
only restructure our organization but also our whole approach to doing
business. Our first priority became the immediate implementation of an
aggressive strategy that would help us attain our original
sales goal and also ensure we allayed customers' fears.”
Four
objectives were set. Kia Saudi Arabia targeted selling 20,000 units,
becoming one of the top five players in the market and largest Kia
distributor in the region, and obtaining a five year agreement with KMC.
To
achieve these objectives, Kia Saudi Arabia implemented an aggressive
strategy. Within the first 60 days, Kia Saudi Srabia appointed three
Regional Directors to oversee the business in Saudi Arabia's three main
provinces, and appointed a regional sales fleet and a service and parts
manager in each region to better oversee day-to-day business
operations. Identifying the importance of customer relations,
particularly given the poor reputation Kia had in the market because of
the recent changes, the distributor also recruited customer care
specialists to interact with and listen to customers.
One of Kia
Saudi Arabia's strengths was the trong sales force already in place.
The distributor was able to implement a shortterm pricing policy that
proved very effective in securing commercial and fleet operator
customers. As a result, there is greater brand awareness and trust, and
these commercial customers are now back paying market prices for Kia
vehicles.
Despite this success, Kia Saudi Arabia still knew that it
needed to further build the backbone of its operation - the retail
sector.
Market share was expanded by not only positioning its
products against the top contenders and emphasizing key Kia attributes
such as value, safety, style and warranty, but also by affirming its
commitment to its customers through enhanced maintenance options and
operating in state-of-the-art facilities to reflect the quality of Kia
vehicles. Marketing and PR played a major role as well. Successful
engagement of the media and profiling of the visionary and stable new
management was supplemented with sponsorships of major community and
high profile sports events. A sophisticated and
entertaining launch
of the Mohave (Borrego) also positioned Kia Motors Saudi Arabia as a
progressive operation and distributor of quality vehicles, while
turning the Mohave into one of the most talked about new vehicles in
the market.
Indeed, the winning strategy had to be implemented at
all levels. “In order to ensure that our strategy was effectively
implemented by our staff, we had to initiate an attractive incentive
program,” notes Mr. Girgis. “Not only did we establish our own credit
division, but we also created a rental division, giving customers more
options.”
And there are plans for more. He continues, “We are
planning to open 25 daily rental outlets by the end of 2009, operating
a fleet of2,000 units. We also plan to develop our longterm commercial
leasing portfolio to 1,000 units per year. This division will be an
integral part of our future expansion goals.”
Just nine months on,
what had once been seen as an “impossible” target of selling 20,000
units has been achieved and a goal of 35,000 units has been set for
2009!
This success received positive endorsement during a visit
in October by KMC representatives who emphasized that, from an
organizational perspective, the distributor is one of the top three
globally, and was confident that Kia will become one of the top three
brands in the market over the next couple of years.
A
28-year-veteran of the automotive industry in Canada and Saudi Arabia,
Mr. Grigis reflects on the dramatic turnaround, “There are two
principles I always return to in this business. The first is that
nothing happens in a car dealership until a new car is sold and the
second is that you can always replace a car but never a customer. So,
at the end of the day, selling a car to every customer that we have the
privilege to serve has been our winning strategy.”
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