Kia's Yaser Shabsogh on factors driving the auto brand's regional growth
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Kia MEA’s VP on factors driving the auto brand’s regional growth

Kia MEA’s VP on factors driving the auto brand’s regional growth

The VP of Commercial Operations at Kia Middle East says the company’s mid to long-term business strategy will heavily focus on electrification, which is reflected in its updated annual 2030 sales target of 4.3 million units

Neesha Salian
Yaser Shabsogh, VP Commercial Operations at Kia MEA

In an exclusive interview with Gulf Business,  Yaser Shabsogh, the VP of Commercial Operations at Kia MEA, delves into its strategic approach in the Middle East and Africa, exploring the factors behind its success in key markets, the reception of its hybrid models, and the company’s electrification strategy.

Which are Kia’s top markets in the Middle East and Africa?

All our markets across the Middle East are fundamental to our regional growth and success. However, our main strategic markets such as Saudi Arabia and the UAE hold significant economic importance with Kia’s targeted focus on volume, alongside Jordan and Iraq in the Levant region and South Africa and Morocco within Africa.

Other markets such as Pakistan, Egypt and Algeria hold much potential, as they are undergoing foreign currency restrictions or fundamental changes to their automotive policies.

Kia’s success in all markets stems from our ability to provide a range of products that meet customer requirements across many segments. We have one of the most diverse and innovative range of products across all manufacturers. Previously, Kia was renowned for quality, but now, we are leading the way in providing vehicles that boast unique design, performance, and customer-centric technology, with a further focus on sustainability, electrification and providing total mobility solutions.

This is also reflected in our distributor operations. We are proud of the partnerships we have established in the region, and we applaud the dedication of our distributors in enhancing all their facilities and improving the customer experience for all Kia customers.

How does Kia tailor its approach to cater to the unique demands of these markets?

Kia maintains a portfolio of diverse vehicles, but our offering spans beyond just our product line-up.

Our technology now includes small engines, turbo-charged engines, hybrid vehicles and all-electric vehicles. Working with our distributors, we understand the market dynamics, which models or specifications work best for each market and in what volumes. We then develop our marketing and sales strategies with our distributors to ensure our joint success.

Going even beyond that, our approach is to pioneer future-forward sustainable mobility solutions. For instance, we wanted to resolve several challenges facing companies requiring unique or highly flexible transportation solutions. So, we introduced our Platform Beyond Vehicle (PBV) solutions, soon available in 2025, which will reimagine the concept of vehicular space with advanced, tailored interiors, providing flexibility and freedom.

How have models such as the K5, K8, Sorento and Niro Plus been received in the Middle East?

We introduced our Hybrid Electric Vehicle (HEV) range primarily in Saudi Arabia and the wider region last year. Our HEV models, including the K5, K8, Sorento and Niro Plus, were well received in the Middle East.

Our biggest challenge at present is managing the demand for our electrified vehicles, be it HEV, plug-in hybrid electric vehicle (PHEV) or electric vehicles (EVs), not just in the Middle East but across the world.

With the growth in EVs, Kia’s global success of our HEV range, and the global limited capacity of battery cells, our HEV production and allocation had to be managed within tight production limits.

While our HEV models successfully meet the needs of eco-conscious customers in the region who are looking to drive in style and elegance while remaining committed to environmental protection, we are facing certain supply constraints.

Kia is currently working towards driving production levels in the region to resolve this challenge, consequently fulfilling the ever-growing demand for our HEV vehicles.

How does Kia engage with its customers in the Middle East to understand their needs and preferences?

At Kia, customer centricity is one of the key pillars of our future strategy. Kia is focused on becoming a sustainable mobility solutions provider, making every customer journey the best it can be. To achieve this, we have integrated this vision into our regional strategy across the Middle East by focusing on enhancing the customer experience through several key initiatives.

For starters, we understand that the first impression of our customers is often the most lasting, which is why we have revamped more than 170 showrooms across the region as part of our new Store Identity (SI) and Customer Experience (CI) standards. These modernised spaces are designed to provide a welcoming and engaging environment where our customers can explore Kia’s range of vehicles and services with utmost comfort.

We have also adopted a data-driven approach to engaging with our customers to truly understand, first-hand, what their needs and preferences are. By analysing customer trends and behaviours, we are gaining valuable insights into what our customers are looking for, and this enables us to tailor our products, services, and strategies to better meet the evolving demands of our customer base.

Aside from our revamped spaces, we’ve also made significant enhancements to our digital channels as we recognise that our customers interact with Kia across multiple touchpoints, both online and offline.

Most importantly, Kia’s commitment to customers extends far beyond the point of sale. We have established robust feedback mechanisms to continuously listen to and learn from our customers – allowing us to remain responsive and adaptive to our customers’ preferences.

In addition to the above, we leverage advanced analytics to monitor customer feedback and market trends proactively. We also have the voice-of-the-customer provided by our distributors, each an expert in their respective markets and customer needs.

How did Kia perform in the Middle East market in 2023?

 We achieved over 200,000 in sales in 2023 for the MEA region, of which 160,000 were secured in the Middle East, marking a 10 per cent increase compared to 2022. We anticipate another five per cent growth in sales this year.

We expect the demand in the Middle East to continue to increase, reaching three million units by 2030 from 2.3 million in 2022, with Kia aiming to sell over 200,000 by 2030 in the Middle East alone.

We’re also witnessing growth in the sales performance of our electrified models as customers in the Middle East continue to grow more environmentally conscious, but this will be a steady transition over the next few years, rather than a major shift.

Which models were particularly successful in the region in 2023?

All of Kia’s models have proven to be successful in their respective segments within the region. However, the bigger segments in the MEA region are the medium and small SUVs as well as small cars. In these segments, our Sportage, Seltos and Sonet are performing well in the SUV market and are all witnessing product enhancements and model line expansion in 2024.

As for smaller cars, our Pegas and Cerato, and now the new K3 are faring well; we are seeing positive sales conversions for every unit we produce for the region.

How has Kia performed in Q1 2024 in the Middle East?

The first quarter of 2024 displayed Kia’s resilient performance, globally and in the Middle East.

Globally, we recorded sales of 760,515 units, out of which 54,000 units were sold in the Middle East and Africa, an eight per cent increase compared to that of last year. Operating profit globally reached KRW3.43tn, a 19.2 per cent increase compared to the same period last year, with an operating profit margin of 13.1 per cent.

We recognised that our quarterly sales slightly decreased when compared to last year on a global level, due to a temporary supply shortage of ICE and HEV models and the gradual EV adoption phase. However, our region saw sales expansion due to better availability of high-selling models in our region.

Globally, we still saw profitability expansion due to stabilised raw material prices, favourable exchange rates, and an improved product mix centred on high-value-added models.

Safety is a crucial factor for consumers. How does Kia ensure its EVs, hybrids and other vehicles are equipped with the latest safety features?

The safety of our customers while in a Kia vehicle is of utmost priority and is a key part of our strategy.

Kia places a strong emphasis on safety, integrating advanced technology and stringent testing protocols across its line-up of EVs, hybrids and other vehicles. We equip our vehicles with state-of-the-art safety features, including advanced driver assistance systems (ADAS) that are designed to mitigate accidents by providing real-time monitoring and automated responses to potential hazards.

For instance, our EV9 offers advanced innovative features such as Driver Attention Warning and Surround View Monitoring.

Elaborate on Kia’s overall strategy for electrification, and how the launch of the Kia EV3 fits into this strategy.

Our overall strategy for electrification is rooted in our global vision, ‘EVs for all’, which aims to expand our EV model line-up on a significant scale, rapidly across markets. To achieve this, we are innovating solutions that address the perceived difficulties causing hesitation among consumers when considering an EV purchase, from price to the lack of charging infrastructure.

Moreover, our mid to long-term business strategy will heavily focus on electrification, which is reflected in our updated annual 2030 sales target of 4.3 million units, out of which 2.38 million units will be electrified vehicles.

The launch of the Kia EV3 is part of our continued focus on strengthening our EV portfolio. We’re setting new standards in the compact SUV segment with a fully electric car that will enhance EV accessibility and improve the perception of electric SUVs with its innovative technology, bold design, and groundbreaking features.

The EV3, like our other current and upcoming EV models, will meet the various needs of consumers in the region, thereby driving electrification.

Within our region, EV3 will be a more accessible EV and will have higher production availability than current vehicles already launched, such as EV6 and EV9.

The Kia EV3 is being touted as a game-changer in the compact EV SUV segment. What are the standout features that differentiate it from competitors?

The Kia EV3 will bring elevated compact EV SUV experiences previously unseen in the Middle East. This vehicle draws on the advanced technology and customer-focused values of our multi-award-winning EV9 but in a compact and accessible form.

Our ‘Opposites United’ philosophy was central to the Kia EV3’s progressive, dynamic and bold design. The car seamlessly combines dynamic aesthetics with thoughtful functionality across its exterior and interior.

The car’s interior is inspired by nature aesthetics and acts as a cabin that exudes a living space-like ambience. With a 25-litre trunk and a 460-litre load capacity, the EV3 offers one of the largest luggage spaces in its class. Other features include a near-30-inch widescreen display, incorporating everything from climate control functionality to a 12.3-inch cluster and a 12.3-inch AVN display.

The EV3 is also a sustainability product, with recycled fabric applied to the dashboard and door trims to create a homely ambience, and polyethylene terephthalate (PET) across the interiors including the seats, door armrests, floor mats, luggage board and other areas.

Superior safety is guaranteed with the advanced driving assistance systems (ADAS) technology. Our Remote Smart Parking Assist enables drivers to drive in and out of tight spaces without the driver sitting in the vehicle.

The EV3 is also the first model to benefit from Kia’s new i-Pedal 3.0 regenerative braking technology that allows the driver to adjust the level of regenerative braking according to their preference, maximising energy efficiency and reducing fatigue on long drives.

Moreover, this feature enables the vehicle to travel further on a single charge, making the journey safer, enjoyable, and comfortable.

What are Kia’s projections for the growth of the EV market in the Middle East over the next five years? Besides vehicle electrification, what other sustainability initiatives is Kia pursuing in the Middle East?

The EV market in the Middle East will experience positive, steady growth in the next five years, reaching approximately $7.65bn by 2028 from $2.7bn in 2023.

However, electrification will remain a bigger focus in more established, EV-ready regions such as North America, Europe and the Far East. We still believe that ICE (internal combustion engine) vehicles will continue to be a major part of our portfolio, alongside our strategic investments in developing 13 EV vehicles from 2024 to 2027. We are also introducing many product enhancements and major updates in our existing ICE models and bringing new models across each of our diverse segments, such as our Tasman Pick-up. Within all our ICE models, sustainability and a contribution to reduced emissions is also part of the strategy.

But our focus and brand strategy go beyond just building great vehicles. To truly achieve a sustainable world, we recognise the importance and power of collaboration in helping people move around in greener ways and make sustainability a part of their present and future.

We’ve formed numerous partnerships with like-minded entities, for instance, our global seven-year partnership with The Ocean Cleanup to make plastic-free oceans a possibility for a better future. Through this impactful collaboration, we are finding innovative solutions to rid plastic waste from our oceans that hold the lives of precious sea animals, and to contribute to a cleaner planet.

Another example is our partnership with Waste Lab last year during Ramadan, which aimed at tackling food waste to transform surplus food into healthy, nutritious compost, reducing carbon emissions.

By partnering with this women-led, impact-driven start-up based in the UAE, we were able to nudge customers into rethinking their lifestyles and mindset around food wastage.

Finally, what is your vision for Kia in the Middle East over the next decade?

 Our vision is simple: To become a sustainable mobility solutions provider.

Kia is achieving this in the Middle East by developing futuristic, innovative, and sustainable EVs, HEVs and ICE models. We are revolutionising transport with a sustainable business strategy that puts customers at the centre of what we do and supports the aspirations of our people for being part of a company like Kia.

Over the next decade, we envision Kia leading the charge in the Middle East’s transition to electric. Our goal is to consistently deliver advanced innovation and technology that meets and exceeds our customers’ expectations. Kia’s portfolio of vehicles will continue to offer exceptional performance, advanced safety, and an unmatched driving experience without compromising on sustainability values.

As the demand for electric vehicles continues to accelerate in the region, we’re eager to expand our EV line-up, tailored to the unique preferences and needs of customers here, thereby driving the region’s electric revolution.

Looking into the future, Kia is poised to be at the forefront of the Middle East’s transition to a greener, more connected automotive landscape. We eagerly anticipate the opportunities ahead as we continue to create new ways of moving around and remain steadfast in our commitment to driving positive change through our innovative mobility solutions.

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