Will Kia Philippines have to to abandon the China-source Soluto sub-B segment sedan and the Stonic sub-compact SUV? If the reports coming out of China are true, these two models may soon become a victim of the Korean carmaker’s upmarket push.
With China scrapping its cap on foreign ownership of automotive joint ventures, Kia is revamping its operations there in order to become more competitive. The joint venture, a 50-25-25 partnership between Kia, Yueda, and state-owned Chinese automaker Dongfeng Motor Group, will be revamped into a 50-50 partnership between Kia and Yueda.
The ownership restructuring, will simplify decision making and improve operating efficiency in Kia.
Amidst the capital reshuffle, Automotive News reports an interesting new move for Kia in China:
The Korean brand will start to phase out production of vehicles priced below 100,000 yuan (USD 15,723) to elevate its brand positioning, according to information disclosed by Yueda [Kia’s joint-venture partner in China].The possible demise of low-priced models though will result in more competitive Kia products, with some headed for export markets. Again, per Automotive News:
The move is intended to address a long-standing problem confronting Kia in China: with low-priced models such as the Pegas [Soluto in the Philippines] and Forte sedans and the KX1 crossover [Stonic in the Philippines], Kia is increasingly seen as a value brand. That has forced it to compete on price with Chinese peers.
Kia plans to upgrade and add technology, driver assistance, connectivity, and infotainment features across its China product lineup and accelerate the introduction of new and redesigned models, including electrified vehicles.
The Korean brand will roll out 6 locally produced full electric vehicles developed on a dedicated EV platform though 2027, with the first model, the EV6 crossover, slated to hit the Chinese market in 2023.
To boost the joint venture’s sales, Kia has also pledged to export more vehicles to markets outside China.
If this report is true, it could potentially hurt Kia Philippines as the Soluto and the Stonic combined make up more than 50 percent of their annual 2021 sales (58 percent to be exact).
If the Kia Stonic will be discontinued in the Philippines, it might be replaced by the Indian-made Kia Sonet that is now available in Indonesia and Vietnam. As for the Soluto, Local Assembly CKD might be possible alongside with the K2500 Truck if the Government is passing the Law in favor of Low-Cost Car Manufacturing.
ReplyDeleteif the sonet will replace stonic in our market, it will be chance to compete the toyota raize as soon as possible
DeleteDiscontinuing the Soluto and Stonic in our market would be terrible. Hope this isn't true.
ReplyDeleteThis is simply a huge blow to Kia Phils.
ReplyDeleteAnd Kia Malaysia will only start to produce it's cars by 2023. Awful timing for Kia, just about when it was starting to hit its stride.
ReplyDeletewell that doesn't bode well for Kia PH :( They need to devise alternatives, stat
ReplyDeleteEven f they continue to sel stonic here in ph der sales wil nosedive cortesy of toyota raize
ReplyDeleteRaise is targeting the market of MG ZS. I think stonic can still be a good alternative here while raize will eventually win just because of the badge.
DeleteMG will take the bigger hit since they now have capable competition from more established brands in this under 1M subcompact segment.
I hope that this is not true. Thinking on the effect of this move especially for people who just got their Kia Stonic.
DeleteKia ph needs to fix it's marketing strategy first
ReplyDeleteThe Stonic actually is doing well here in Ph.. It will all be a waste if they discontinue it..
ReplyDeleteUly, isn't it Kia also assembles their Soluto (I don't know if they assemble Stonic/KX1 as well) in their Vietnam plant?
ReplyDeleteMaybe my information is outdated I don't know, but if Kia and their Chinese joint venture with Yueda seems to push through discontinuation of KX1 and Pegas, maybe Kia PH can source it somewhere in Southeast Asia where it is locally assembled (Vietnam and Malaysia, but alas Malaysia's yet to produce vehicles by 2023.) Kia's in a home run with their Stonic and Soluto, only to be phased out soon by the mothership. This will seriously hurt Kia PH.
To add Uly, Kia also locally assembles their Stonic in Pakistan (but I don't know if we are capable of exporting units from there.)
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