With price competitiveness as its unique selling point Kia had enjoyed strong growth in the two years from 2003 said Philpott, who took up his position last month “Customers came from used cars and bought new Kias,” he said. Kia sold 30,000 cars to retail customers in 2004, he claimed. However, since then market conditions have toughened and competitors lowered prices to stimulate demand, eroding Kia's price advantage. “The only reason Kia had given to buyers to consider a Kia was price,” said Philpott. “But our ability to compete on price and sustain volumes declined.” Total sales rose to 39,000 in 2005 but private sales declined as high-cost fleet and rental business grew – hitting dealer profits. “We don't have a D-segment product so the fleet business was high cost and low margin,” said Philpott. He said from 2004 to 2006 retail sales plunged 40 per cent to 18,000 and warned “if dealers don't make money they won't invest”.

Kia sold 30,000 cars to retail customers in 2004, he claimed. However, since then market conditions have toughened and competitors lowered prices to stimulate demand, eroding Kia's price advantage. “The only reason Kia had given to buyers to consider a Kia was price,” said Philpott. “But our ability to compete on price and sustain volumes declined.” Total sales rose to 39,000 in 2005 but private sales declined as high-cost fleet and rental business grew – hitting dealer profits. “We don't have a D-segment product so the fleet business was high cost and low margin,” said Philpott.

He said from 2004 to 2006 retail sales plunged 40 per cent to 18,000 and warned “if dealers don't make money they won't invest”. Philpott said Kia must convince consumers of its product strengths and boost brand awareness. “Consumers perceive the product as cheap and cheerful but it's much better than that,” he said. “The Kia brand is a blank sheet. Only 14 per cent of car consumers are aware of the brand.” Philpott said Kia had failed to invest in its long-term future and that its pledge to reach 100,000 UK sales by 2010 was “unlikely” and not based on solid foundations. “I intend to prioritise funds for the long term. We have not built a plant in Slovakia for the short term.” He said sales would not exceed last year's total of 35,800 in 2007 but that the mix would improve with more retail sales and corporate business generated by dealers through major fleet accounts.

“We must change the way we go to market. We must compete on product and quality,” he said. In a drive to raise the brand's profile, Philpott said Kia ads would feature on TV in seven months this year compared with just one in 2006. Philpott said the network had undergone a 20 per cent churn in 2006 but that the total number had remained constant at 150.