Ayala-controlled (through ACMobility) Kia in the Philippines had some good news to share recently. Citing the H1 report of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) which it is a member of, Kia Philippines said it emerged as “the fastest-growing brand among the country’s top 10 automotive players.”
Its 4,195 units sold for the span reflect a 71-percent uptick from the same period last year. “This strong performance reinforces Kia’s solid position in the local market and reflects rising consumer demand for its modern and versatile lineup,” its release continued.
As it rode the crest of its recent milestone, Kia Philippines seized the opportunity to introduce its new managing director to members of the media and content creators. Jay Lopez took the helm last May, and the executive brings with him a diverse background with stints in multinational agriculture, pharmaceutical, and FMCG (fast-moving consumer goods). Interestingly, it’s his first stint with an automobile company, but insisted that it’s exactly why he’s a perfect fit for the job.
“When Ayala invited me, they were really looking for fresh perspective, outside looking in, another angle for distribution,” he shared when asked by this writer. “I think it’s nice to work for a local conglomerate, I’m now reporting to Jaime Alfonso (Zobel de Ayala, CEO of ACMobility)… it’s a nice change. Everything stops with Jaime,” he said with smile, adding, “I may not have been in the automotive industry, but I have loved cars (ever since).”
His consumer background brings in insight, he averred. Ad spending in MNCs (multinational corporations) is huge. “You really need to do a lot of testing first; understanding (and) segmenting the consumers to really pinpoint the focus.”
Winning is also about market share, longevity. “It’s all about branding,” Lopez insisted. His stint with pharma, on the other hand, drove home the importance of relationships, as well as working within the parameters of “a highly compliant and regulated” sector.
Meanwhile, his time in the agricultural business gave him, among other things, a keen comprehension and appreciation of how different the Philippine market is. Unfortunately, we consume far less vegetables (around 30 metric tons a day for Metro Manila, per Lopez) than the average population. He attributes the discrepancy to our taste for meat – a cultural hand-me-down from our colonial days. Our favorite vegetable? Eggplant.
Marching orders
This writer asked the executive for his marching orders upon his hiring and, perhaps even more importantly, how does Kia figure in the Ayala Group’s portfolio relative to BYD, which has seen the lion’s share of publicity and attention even when compared to other brands outside of the Ayala ambit.
“Kia is a top priority in the ACMobility portfolio. It has one of the deepest pipelines, very rich,” the executive asserted. “It’s also kind of misconstrued sometimes… all the limelight is (on BYD) because it’s a hotcake right now. But of course, (the question is) how do we spice it up with Kia (especially since) it has a lot of offerings?”
Lopez admitted that Kia may have been “a little bit conservative in the past years,” but this is not necessarily because of BYD. In fact, he sees the two ACMobility brands as being “complementary, in way.” He added, “But at the same time, I don’t attend BYD meetings and (BYD people) don’t attend ours. Although both are just under one umbrella, both are kept at arm’s length. My task is really to grow Kia. It’s growing right now because of the Sonet (with 3,171 units sold, leading the Kia’s H1 charge), but I think there’s so much there that’s untapped.”
Hurdles
“If you dissect the car business, the biggest barrier for me right now with Kia is… a gap in the market. Napagiwanan (left behind). I would see that in the showroom. People would say ‘Ito na pala Kia ngayon, malaki na pala pinagbago’ (So this is Kia today; a lot has changed),” he said.
Many buyers’ notion of the brand, which has been in the country for more than a while, is still “rooted in the past,” Lopez rued. “They know the brand, but they don’t know what’s inside Kia now.” On the other hand, he sees a lot of loyalty for models like the Carnival MPV, with 60 to 70 percent being repeat buyers.
Amid the glut of choices in the last few years, Lopez said that Kia has been overshadowed, especially since its “advertising muscle is not that big.” There’s the rub.
“People have to know that there’s a better alternative,” he maintained. “We don’t aspire to be number one… We are currently in top 10, and we’re still in a very good position.” He sees they can at least go two notches higher.
“The Koreans have done their homework, intelligent engineering, quality, boldness of style, comfort, value for money,” Lopez stated.
Portfolio management
After the executive did a “deep dive on all the archetypes of drivers, buyers,” there were some tough questions asked none bigger than this: Does Kia have the right portfolio in the Philippines? “We’re one of the few companies (offering) ICEs (internal combustion engines), HEVs (hybrid electric vehicles), and EVs (electric vehicles). It’s a good portfolio,” he ascertained. “We feel that the future is really going to be in EVs. ICE will still be there, but I think if you look at the curve the two percent (comprised of) early innovators are already driving EVs, HEVs. We’re not even maximizing all the innovators.
“Based on research, we thought that the jumping point earlier was HEV and then they’ll wait for EVs in five years. Right now, we’ve seen that after just two years, they jump straight to EVs.” They apparently want more of the battery-only performance, Lopez maintains.
For the broad strokes, Jay Lopez has been told to “accelerate Kia with the right offerings and opportunities.” The company is currently in seven of the 28 vehicle segments as defined by CAMPI. This may seem few but he said that these seven account for 40 percent of the market.
Still, Lopez reckoned, “There are still opportunity boxes where we’re not yet there. I’m also looking at the ability to win. If we bring in products, we don’t want to burn money after a few years, (when) we’re left with aging stocks, exit, and then the consumers get confused.”
There’s obviously excitement in the Kia Philippines’ new managing director, but he’s tempering his actions with the long game in mind. “For me, I want to be sustainable, grab market share, but do it the right way,” he insisted.
It’s about choosing his battles, but he is confident in the mix and depth of offerings from the brand. Lopez wouldn’t have signed on with Kia Philippines if he wasn’t impressed by its pipeline of products, he said in closing.
