Kia steals march on war­ranty

A pioneer in cus­tomer cov­er­age, the Korean brand goes to seven years

Herald Sun - Motoring - - NEWS -

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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