Kia announced its “Plan S” strategy for its future business On February 9th, Kia Motors Corporation announced the ‘Plan S’ strategy for its future business at the 2021 CEO Investor […]
Kia announced its “Plan S” strategy for its future business
On February 9th, Kia Motors Corporation announced the ‘Plan S’ strategy for its future business at the 2021 CEO Investor Day, held digitally in Seoul. In the “Plan S” strategy, there are three key initiatives below.
First, to advance Electric Vehicle (EV) transition
By 2030, environmental friendly vehicles such as EVs, HEVs and PHEVs will make up 40 percent of all sales, and its annual sales target is 1.6 million units. As part of this ambition, Kia aims to grow EV sales to 880,000 units in 2030 and tries to be a top global seller. The company will launch its first dedicated EV later this year, and strengthen its EV lineup by 2026 with 11 new models.
Second, to strengthen PBV business
The South Korean automotive giant will unveil its first purpose-built vehicle (PBV) in 2022, and will launch further PBVs based on market needs. The company’s target is an annual sales of 1 million units by 2030 so as to be a world leader in the PBVs market. To realize this goal, Kia will develop a variety of specialized vehicles based on its PBV-dedicated skateboard platforms. The company is also planning to expand its PBV business further through open innovation by cooperating with other companies and it tries to develop small or large board platforms for unmanned delivery and e-commerce sectors.
Third, to expand future mobility services
Kia’s mobility services will gain a competitive edge by targeting cautiously and focusing on core areas. On one hand, in the business-to-consumer domain, the company will strengthen existing services. For example, in Spain, the company will expand its flagship car-sharing service Wible through a new brand name as Wible Más and Wible Empresas (tentatively named). The driver based service “KiaMobility”, which was launched in September 2020 as a pilot project in Italy and Russia, will also launch in additional European markets.
On the other hand, in the business-to-government or business-to-business domain, the company will launch an EV-based service that combines subscription and car-sharing service. For example, Kia’s subscription program “Kia Flex”, which was introduced in Korea in 2019, will launch as a global version later this year under the name “Kia Subscription”. Sixt Leasing, which was acquired by Hyundai Motor Group 2020, will operate its service.
Who is Kia Motor Corporation?
Based on its homepage, Kia Motors Corporation is a South Korean multinational automotive manufacturer and it was founded in May 1944. In fact, the company is Korea’s oldest manufacturer of motor vehicles, and global Hyundai-Kia Automotive Group became the world’s fifth largest vehicle manufacturer.
Today, Kia produces more than 1.4 million vehicles a year and it has 14 manufacturing and assembly operations in 8 countries. These vehicles are sold and serviced through a network of more than 3,000 distributors and dealers cover 172 countries. The South Korean automotive giant has more than 40,000 employees and annual revenue is more than US$17 billion.
In South Korea, Kia operates three major vehicle assembly plants such as the Hwasung, Sohari and Kwangju. In addition to this, a world-class research and development center employs 8,000 technicians at Namyang and a dedicated environmental R&D center. The Eco-Technology Research Institute, which is located to near Seoul, is working on hydrogen fuel-cell vehicles for the future as well as state-of-the-art end-of-life vehicle recycling technologies and processes. Kia invests 6% of its annual revenues in R&D and also runs research centers in the USA, Japan and Germany.
The announcement shows inevitable consequence in CASE era
According to the other article about a possible deal between Kia and Apple, Kia could have been a partner with Apple to manufacture its Electric Vehicle, possibly called “Apple Car”. Even though they did not reach an agreement, Kia’s ambition to transform the oldest Korean automotive company into the company that succeed in CASE age never ends. In fact, the company has announced its strategy related to new focused business areas, especially electric vehicles and software services. However, we can say that this announcement is the inevitable consequence at the same time, because Kia might not be able to survive if the company does not strengthen these two areas.