KIA to expand marketing budget

Yuntung Motors Ltd (運通汽車), which distributes South Korea's KIA cars in Taiwan, is banking on a sports marketing strategy to build up brand identification in the hope of sustaining the strong sales growth.

"Even though autos are ... industrial products, purchases are actually very much driven by emotional factors," David Tung (佟德望), Yuntung Motors' general manager, told the Taipei Times on the sidelines of press conference yesterday.

The vendor is aware that it still has a long way to go to enhance its brand image, and promotion is key, Tung said.

Since baseball has a large fan base in Taiwan, Yuntung is going to invite Kia Motors' professional baseball team, the Kia Tigers, for a friendly match with the Uni-President Lions (統一獅), a team run by Uni-President Enterprises Corp (統一企業), between Feb. 25 and 27, in a bid to raise visibility.

Last year, the distributor's sales doubled to around 5,500 vehicles after it recruited well-known super-model Lin Chih-ling (林志玲) and pop girl-band S.H.E. to do a series of commercials.

"The decision paid off greatly," Tung said.

Tuntung, which hopes to sell 8,000 vehicles this year, plans to expand its marketing expenditures by 20 percent from the over NT$100 million it spent last year.

However, promotion may not be a cure-all.

"The plight facing us is that ... our competitors are mainly locally made vehicles instead of luxury imports," Yuntung's marketing manager Lars Su (蘇意弘) said.

Pricing is therefore a key issue.

Yuntung distributes three models of sport utility vehicles with price tags ranging from over NT$630,000 to NT$1.3 million, and one model of the vendor's best-selling mini passenger car, the Euro Star, priced from NT$399,000.

Consumers in this segment are very price-sensitive, which puts Kia cars at a disadvantage, as they are subject to foreign exchange fluctuations, Su said.

Another advantage for local automakers is local consumers' deep-rooted belief that Korean made vehicles are poorly made.

"To most people, Korean cars are [thought of as] a piece of crap," said Jimmy Chuang (莊明勳), a 32-year-old mass media employee who just bought his third car last month.

The fast depreciation of Korean cars compared to Japanese or European vehicles also makes them less-than-ideal purchases, Chuang said.

Acknowledging that the negative image was bad for business, the distributor last April tried to break into the young consumer segment by introducing its Euro Star mini car.

The model, which mainly lured buyers aged below 25 years old, accounted for nearly 50 percent of sales last year, according to the distributor.

"Young people stereotype less," Su said, adding that cultivating younger customers has other benefits.

Those people will upgrade to our higher-end products as time goes by, he said.