Kia steals march on warranty
A pioneer in customer coverage, the Korean brand goes to seven years
KIA is about to lift the bar on new-car warranties in Australia to seven years.
After helping drive the customer coverage to five years and unlimited kilometres from the previous three-year warranties across the new-car landscape, Kia is close to an even longer commitment.
Kia provides a seven-year warranty in 20 European countries including Germany, and new company chief Damien Meredith says seven is likely to be right for Australia without giving a firm commitment or start date for the change.
“It’s good for new-car buyers and it’s also good for residual values in the used-car market,” Meredith tells Carsguide.
A seven-year package will take it a year past Citroen, which gives a six-year warranty on some models.
It will give Kia a considerable edge over its five-year value rivals, Hyundai and Mitsubishi, and a similar break over Peugeot and Renault.
Full details of the plan are still being finalised but, since Meredith is going public, the seven-year warranty is almost a foregone conclusion.
“We are considering it and costing it as we speak,” he says.
The warranty upgrade comes as Kia looks to shift away from its price-driven approach in Australia, instead building on the strengths of its cars.
Kia has 122 dealers in Australia and, interestingly, has a higher loyalty rate than its senior brand Hyundai, even though the two companies are twin auto badges in a larger Korean conglomerate.
It rates tenth in new-car sales, a position Meredith is keen to improve — but without stealing sales from Hyundai.
“Our focus isn’t on the 12 per cent that Hyundai and Kia have now, it’s the 88 per cent we don’t have. If Kia is successful and we pull three market share points away from Hyundai that doesn’t help anyone. We have to (bring in) people not buying Korean at the moment.”
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