As supply chain constraints loosen, and retail showroom traffic slows down, many manufacturers will be counting on fleet buyers to help them maintain sales volume until interest rates and inflation fall again. The success of this channel pivot will depend on the strength of the B2B relationship and how well it was maintained during the tough times.
One manufacturer that has received praise from customers, and the fleet industry, is Kia Australia. Chris Forbes, General Manager – Fleet at Kia, and his team have maintained customer relationships over the last three years and are in a great position to capitalise as more stock arrives in Australia.
I caught with Chris in July (after the QLD Police announced they had purchased the EV6 GT) because I wanted to know more about their approach to fleet business and how important it is to Kia.
So Chris, can you share with the audience what fleet business means to Kia?
Yes, it is extremely important to Kia Australia. Throughout the last few years, especially through COVID, it was definitely an area of our business that we wanted to keep going to the best levels we could given the constraints around supply. In addition, where other OEMs may have reduced their fleet presence, we are increasing it with additional resources being sought to bolster our already dedicated team.
And we’ve also ensured that whilst our customers haven’t necessarily got the vehicles they requested, in an ideal timeframe, that they were looked after, and communicated with in terms of when they might expect those vehicles.
So whilst we may feel like we have let them down, in terms of delivering vehicles when expected, we do feel that we gave them the best information we could. In turn, that transparency and trust has paid dividends as those customers have stuck with us and continued to purchase our vehicles, and our relationships with them have been stronger than ever.
Since the pandemic there’s been some model changes. The Rio has been a popular fleet car and that’s no longer available, how is the model transition being received by customers?
Rio has long been an asset to the Kia fleet team due largely in part to it being a small hatchback and carrying a five star ANCAP. However, with that vehicle no longer coming to Australia, we’ve pivoted our fleet strategy and offered new solutions.
To date, the results have been encouraging with some Rio customers moving straight into our Stonic light SUV and Seltos small SUV, with even instances of some stepping into our Sportage medium SIUV.
There certainly have been customers that have been able to look at a larger vehicle, being the Seltos and Sportage, that would still meet those capabilities and still be fit for purpose.
We have a number of large customers that have been taking Rio for many, many years. So yes, there’s definitely been a challenge there. But, what I will say is the Kia fleet team have taken a ‘glass is half full’ approach and viewed it as an opportunity to talk more about other models in the Kia portfolio.
Has there been any other key models that have changed recently?
The only other model recently that has ceased is Stinger, and that’s been a tough one as well when you consider that we’ve placed Stinger in a number of police jurisdictions around Australia.
That’s something that we identified to them as early as we could and gave them the opportunity to look elsewhere for operational vehicles that met the same requirements that the Stinger gave them.
And in many cases, they’ve managed to find other similar vehicles. However, we will continue to talk to them about other vehicles in our portfolio that may meet those requirements. This level of transparency, I feel, is a non-negotiable in the fleet space and leads to better relationships down the track.
Several Kia models have won awards from consumer motoring publications recently, do these awards influence fleet buyers?
Look, these awards are tremendous for validating the quality and reliability of the Kia product.
Yes, fleet and retailer buyers are materially different, but it would be remiss of me not to think there is some form of incremental fleet benefit from the brand winning roughly a third of all major Car of The Year Awards in Australian since 2021.
I remember a decade ago, Kia took some local fleet customers to Korea as part of a global fleet conference, is fleet still as important to Kia globally?
A really good question. I still keep in contact with Kia fleet people from around the world. We’re in semi-regular contact, and like for us, it has been tough globally. No different than Australia with limited supply of vehicles.
What we’ve seen, certainly with electric vehicles, and our push in that electric vehicle space, that there’s a lot more fleets that are taking up those vehicles, and Kia are very much wanting to go down that path globally. To offer EVs to both retail customers and fleet customers.
The QLD Police recently announced that the EV6 GT had joined their operational fleet, Kia has had some success with emergency services over the years, what do they look for in a fleet vehicle?
Generally for an operational vehicle, because there’s they’re quite different to the pool cars and the cars that maybe some of the more senior police drive, they need to meet a number of requirements.
Usually first and foremost is track testing to ensure the vehicle meets braking, acceleration, general drivability and handling ability for the operation they’re going to be engaged in. And with Highway Patrol and those high speed types of environments it’s a slightly different requirement. And they are tested to an inch of their lives on those tracks.
Interestingly enough, the tests that are used by police around Australia are all different. I don’t think that there is much crossover in terms of the tests being conducted in each jurisdiction. Some of them might be slightly similar, but they all treat them very, very differently, which is interesting because sometimes a vehicle will pass here, but not passed there. And you wonder why but then you look at what they’ve done and you think okay, well, obviously there is some differences in how they see them.
Do you have any vehicles with ambulance services?
We do. We sold a number of Sorento to New South Wales ambulance over time. And there are other ambulance organisations around Australia that we are in current discussions with.
When you sell non-operational vehicles to police and emergency services, do they have the same stringent testing regimes?
When we sell vehicles to police and emergency services, they’re not upgraded with anything special for the engine or the brakes or anything like that, which is often talked about and online you see people saying that the vehicles the police receive have been heavily modified. That’s definitely not the case for us.
Our aftersales department wouldn’t be too happy if that was the case. We do, however, offer some factory accessories, like towbars, cargo barriers, nudge bars; even all the way to a wiring harness which allows them to run a secondary battery and to also plug in light bars, radios etc. And it gives them other capabilities as well within the cabin that further meets their operational requirements.
And that wiring harness at the moment is available in one or two vehicles in our model range. We’re looking to expand that as we look to put more and more models in the various police forces around Australia.
In QLD, the police have announced the use of the EV6 GT for highway patrol cars. Is it the performance they are seeking from electric vehicles, or is it part of their goal to reduce emissions?
I definitely think that performance was part of the decision making process once they decided look at EVs.
I think first and foremost, it’s a general government direction. throughout Australia. There aren’t too many state or federal governments that aren’t pushing their own internal fleets down that green path. Whether it’s ACT, the federal government, Queensland, or other states. They are wanting to try and change their fleets from the standard I-C-E vehicles. And in some cases, even from hybrids into a full electric fleet.
So it makes sense then that various arms of government whether it’s health, education or even police, look at the EV situation.
However, it is a little bit different with police being a first responder and needing the ability to be able to get to where they need to go in a hurry and without having to wait around for a charge.
In Queensland, that was certainly pretty exciting for us to see those are the first of five highway patrol vehicles to be launched from Cairns to all the way down the coast. And the Assistant Commissioner did point out that they weren’t replacing existing vehicles.
It was a 12 month trial to see how they would operate in those environments. They were going to be additional vehicles to see how they compared to the I-C-E vehicles within those stations where they are based.
