More Power To Surprise: Ayala conglomerate takes over Kia in PH

Truly, in the end, it wasn’t even news anymore for many industry observers.

For a quite a while, the automotive industry had already been rife with murmurs about the mighty Ayala conglomerate’s interest in the local business of South Korean automaker Kia, which had seen a precipitous drop in performance and even market perception in the Philippines.

On January 30, Ayala Corporation will make it official with a much-anticipated relaunch of the brand in the country following a formal appointment last December 5. Kia Philippines now operates under AC Industrial Technology Holdings, Inc. (AC Industrials), which also steers Integrated Micro-Electronics, Inc. (IMI) and AC Automotive – led by chairman Arthur Tan and president Manny Aligada. The marque will take its place as the sixth mobility brand (following Honda, Isuzu, Volkswagen, KTM, and Maxus) in the growing portfolio of Ayala.

Presiding over a press conference with members of the motoring media recently, Aligada said that three new models will be unveiled during the launch, but kept mum about the nameplates. After 14 years as a Globe Telecom executive and a further six years with automotive operations, Aligada undoubtedly faces a daunting “objective to stabilize the business (and) build the Kia brand, (while) emphasizing on the Ayala partnership.” He added that the group was actually invited to bid.

Replying to a question from STAR Motoring, the executive said that there are key “elements” of a quick win which would most easily bring the brand into a state of health. Along with having a “significant, relevant product line,” the enterprise needs to remove barriers of entry into ownership. “Are we able to apply proper support systems to make ownership possible? In this industry, over 60 percent need financing of some sort,” he explained. “If we’re not able to address that, that is one critical player option that could run down our business. Even today, we’re working with financial institutions to make sure that they understand what the brand represents, they know who represents the brand here, and therefore provide competitive offers across.” The former franchisee, he admitted, was found wanting in terms of the “consistency” in which these values were delivered.

Through a 15-year span, Kia Philippines peaked in unit sales in 2015 and in market share in 2012 (4.1 percent). This year is set to close with the most dismal performance both in terms of market share (0.6 percent) and unit sales (2,400).

One thing going for the business is that Kia already has a substantial dealership network with 37 showrooms and some 20 dealer principals. It would be a matter of further strengthening this sales and service infrastructure and maximizing presence by enhancing facilities. “Given the plans that we have, there is a need to improve on the current setup that we have and further expand,” continued Aligada. Kia Philippines is now hard at work to bring the brand up to speed in order to standardize an experience of quality that extends from the showroom to aftersales. “Durability, reliability, aftersales… We want to bring these back into the Philippines and use them as springboard,” he underscored.

Kia is banking on the “application of new concepts” that will “incorporate digital capabilities of contact, engagement of sale, buying behavior, and engagement behavior.” Aligada said he is cognizant of the fact that today’s customers walk into showrooms without brochures in hand. “They come very aware of what they’re looking because of internet access,” he explained. “What we want to do is get involved in those… next-generation platforms aligned with future market requirements (in addition to the) vehicles themselves and the capabilities of our customer touchpoints.”

Raised during the press conference were reports of inadequate vehicles on hand that possibly contributed to hamstringing the marque. The new Kia Philippines admitted to being aware of this feedback, promising, “One of the key elements that we committed to deliver is to make sure that when we carry the brand of Ayala, it comes with a minimum level of quality – in this case experience, because ours is a customer-driven business. Part of that is ordering and forecasting.”

Kia is betting heavily on its future, touting an “aggressive projection (it is) hoping to exceed.” Perhaps unwittingly paraphrasing Star Trek, Manny Aligada envisions Kia to “go where we are not there yet,” in order to bring the company quickly into a state of health. Yes, to us it sounds like warp drive is set to be engaged.

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