- Deal with Itochu gives Kia control of four European distributors
SEOUL September 3 2002 - Kia Motors has expanded its direct control over its distributor network in Europe by buying out four distributors previously operated by Itochu.
Kia now owns distributors in the Czech Republic, Austria, Hungary and the United Kingdom in addition to its existing distributors in Germany, Poland and Belgium. Other operations are run by independent or partly-owned distributors.
The deal with Itochu was initiated when the Japanese company decided to end its Kia franchise in the Czech Republic, Austria and Hungary. Subsequent negotiations between Kia and Itochu added the U.K. market to the list. The deal gives Kia significantly more control over the development of the brand in Europe and paves the way for an improved and expanded dealer network in the region.
Kia`s chief operating officer, Mark Juhn, said of the deal, "This gives us the opportunity to use a number of strategic markets to introduce and promote new and improved vehicles. Kia Motors aims to increase its European sales to 300,000 by 2005 and this agreement is an important step in achieving that goal."
Kia Motors began operations in Europe in 1991 and opened a regional office, Kia Motors Europe, in 1995. The company currently occupies 0.7 percent of the European market. Kia`s total retail sales in Europe in the first half of 2002 dropped slightly to 58,572 units from 59,111 last year, reflecting a decline in the market as whole. However, the introduction of the new Sorento SUV and the New Carens, which now includes a diesel option, is expected to boost sales in the second half. Retail sales in the four distributors purchased from Itochu amounted to 15,698 units in 2001.
Founded in 1944, Kia Motors Corporation (www.kia.co.kr) is Korea`s oldest manufacturer of automobiles. A part of the Hyundai Automobile Group, the company currently exports around 600,000 vehicles per year through a network of distributors that covers 160 countries. Kia Motors is the major sponsor of the Australian Tennis Open.