Kia Cerato reaps ‘free air’ rewards in small car class

KIA Motors Australia (KMAu) chief operating officer Damien Meredith has declared that rivals abandoning the $19,990 driveaway end of the small car class has provided “free air” for its Cerato range, which uniquely retains that pricetag.

The four-year-old current-generation Cerato has enjoyed 52.5 per cent year-to-date sales growth that Mr Meredith said both vindicates the company’s “aggressive” price positioning in the market and reflects the extra room rivals have made for the hatchback and sedan range.

“I think what has happened is that $20,000 price point has opened up and, yes, we’ve got clear air around that price point,” Mr Meredith told GoAuto at the national media launch of the Kia Stinger in Canberra last week.

“We have shop presence in that price point now. And Cerato three years ago was, I think number 11, number 12 in the small car segment. It’s now number four. So obviously it (the strategy) has worked.

“And we believe that you have to be aggressive in that very, very competitive small car segment.”

By August last year the Cerato tallied 8581 sales behind the Volkswagen Golf (13,854) and less than one-third of the volume of the Hyundai i30 (26,937).

To August this year the Kia has nabbed 13,083 sales, eclipsing the Volkswagen (11,534 and down 16.7 per cent) and narrowing the gap to the Hyundai (18,803 and down 30.2 per cent).

Left: Kia Motors Australia chief operating officer Damien Meredith

While Hyundai enjoyed huge sales success with its i30 Active retailing at $19,990 driveaway throughout most of 2016, its third-generation model has this year launched from $23,250 plus on-road costs with an automatic transmission.

Mitsubishi has moved its ageing Lancer to $21,990 driveaway with an auto, with sales shrinking by 9.9 per cent from 5413 to 4877 sales, while Nissan has pulled its Pulsar from sale altogether. It had notched up 3965 sales over the first eight months of 2016, versus 140 this year.

The Cerato now only trails the Toyota Corolla (25,610 and down 7.0 per cent) and Mazda3 (22,681 and down 7.1 per cent) in addition to the i30.

It also comfortably leads the Ford Focus (4121) and Holden Astra (6691) as well as the only two models to achieve greater growth, the Honda Civic (8773 and up 157.5 per cent) and Subaru Impreza (8259 and up 131 per cent), which have flown in the face of a small car class that has declined by 3.6 per cent this year.

Yet Mr Meredith also insisted that the majority of buyers did not choose the entry-level Cerato S but rather the Cerato Sport at $22,490 driveaway and the Cerato Sport+ at $24,990 driveaway.

The key to the successful strategy of persuading buyers to move beyond the entry-level model was, he argued, providing vast extra equipment in higher models for not much more.

“The fact is that 80 per cent of our (Cerato) sales are actually in the $23,000 to $25,000 bracket,” he explained.

“So I consider ourselves between $23,990 and $24,990. I think it’s very clear ... for the customer to see they (higher model grades) are there and step up in that.

“It’s not a big gap. It’s not a $4000 gap between S auto and Sport. So, it’s stepped up quite nicely. That’s important and it has working well for us.” The actual $2500 price premium for Cerato buyers moving between S and Sport buys 17-inch alloy wheels (replacing 16-inch steel wheels), 7.0-inch colour touchscreen with Apple CarPlay/Android Auto smartphone mirroring technology and satellite navigation, rearview camera (in addition to the front and rear parking sensors already standard), leather-wrapped steering wheel and gearshifter and automatic on/off headlights.

The further $2500 premium moving from Sport to Sport+ buys leather trim with driver’s seat electric lumbar adjustment, keyless auto-entry with push-button start, paddleshifters and an auto-dimming rear-view mirror, while remaining below $25,000 driveaway with an automatic transmission included.

All three grades utilise the same 2.0-litre four-cylinder petrol engine with 112kW/192Nm and official combined-cycle fuel consumption of 7.2 litres per 100 kilometres.