Since AmInvestment Bank congratulated Bermaz Auto on their “potential win of the KIA manufacturing, assembly, and distribution rights, possibly by April 2,” the rumors that the KIA brand will move from Naza Kia to Berjaya Auto (Bermaz), similar to what happened with the Peugeot brand moving from Nasim to Berjaya Auto Alliance a few months ago, have been going around for a while. It appears to be confirmed.
Since Kia has been operating in Malaysia for some time, we got in touch with the brand office there. They reassured us that all current running vehicle warranties were all still very much intact and that the KIA name is still very much in use there.
Yes, Naza KIA was set to step down as the brand guardian of KIA in Malaysia. KIA Malaysia was in “talks” with Berjaya (B Auto), a new brand guardian who was prepared to look at resurrecting the brand with new and exciting automobiles as well as better after sales.
In the meantime, Naza KIA released the currently well-liked KIA Seltos Crossover in January 2021 after hyping it for six months. Only 1 (ONE) unit of the Seltos has been sold and delivered since that time, and that was just last week. The Kia Seltos is sold for RM115,888 for the EX version and RM133,888 for the GT-Line variant with high-end features.
The Naza KIA used car buy back program, which was introduced in November 2016, has not yet received confirmation. This could provide a problem for KIA owners who appreciated the service.
The KIA Value 5 program was launched by Naza KIA and allowed qualified customers to trade in their cars for a guaranteed future buyback value after five years of ownership. For instance, we are aware of a 2017 KIA Cerato 2.0 owner who paid RM124,888 for his car and is currently concerned about the RM44,000 buyback guarantee when he wants to sell it in two years. This is a Naza KIA project for its clients; KIA Motors is not supporting it. To find out whether the new KIA brand guardian will adopt this initiative or not, we are awaiting word from the KIA team.
Therefore, intriguing new KIA models may be on their way to Malaysia under the new brand steward. The brand-new Kia Carnival MPV from the fourth generation, the award-winning K5 sedan from all around the world, and perhaps the brand-new Sorento luxury SUV.
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How will Kia Malaysia be replaced?
Bermaz Auto (BAuto), through a new advertisement, has officially announced that it will be acquiring the Kia franchise in Malaysia after months of rumors and speculation “relationship with Kia Motors in a strategic manner.
In accordance with the agreement, Kia Malaysia Sdn Bhd, a new joint venture business, will be established to handle local assembly for complete knock-down (CKD) Kia automobiles in Malaysia.
In the meantime, Dinamikjaya Motors (a Bermaz Auto affiliate) has been chosen to replace Naza Kia Malaysia as the distributor for the South Korean company on our soil.
The Kia Seltosand Carnival is one of the three models already scheduled for local assembly here in Malaysia; a third model will be unveiled at a later date.
Tae Hun (Ted) Lee, President and CEO of Kia Asia Pacific, said, “Kia is happy to join the Kia JV and Kia Distributorship with BAuto after months of looking for the ideal partner. We believe we have put the Kia brand in capable hands under the capable leadership of its Executive Chairman, Dato’ Sri Ben Yeoh, thanks to BAuto’s demonstrated capability in successfully developing automotive marques in Malaysia and the Philippines as well as their experience in the automotive manufacturing industry.
Dato’ Sri Ben Yeoh, executive chairman of BAuto, continued: “We are grateful for the chance to work with our partner, Kia under Hyundai Motor Group, the second-largest international automaker in Korea and the fifth-largest automaker in the world at the moment, on the Kia JV and Kia Distributorship.
“We anticipate a fruitful partnership with Kia and the Kia JV and Distributorship will enhance our current Group automotive activities.
The announcement comes shortly after Berjaya Auto Alliance SB, a new joint-venture firm founded between Bermaz Auto and Berjaya Corporation, took over management of Peugeot. After Peugeot and Mazda, Kia will be the third brand associated with BAuto in Malaysia.
What’s wrong with Kia, exactly?
Kia stated that 100,000 of their vehicles were susceptible to engine stalling in 2019. Since then, they have claimed that software, not a hardware option, is at blame. But it has come to light that several of their other models also have real issues.
For instance, the oil rings on the Seltos and Kia Soul crossovers that are impacted are overly stiff. This hardness may cause cylinder bore and piston wear over time, leading to excessive oil leaks and engine knocking.
How was Kia Malaysia owned?
Just take a look at the models that are available in right-hand drive to get an idea of how little attention Kia pays to customers in this region.
Only left-hand drive versions of the Kia Soluto, a good B-segment sedan that competes with the Honda City and Toyota Vios, are offered. Despite the fact that B-segment sedans are the most common type of passenger automobile in this region, this is the case.
The attractive Kia Optima, on the other hand, is only offered in left-hand drive and Kia has stated that it has no intentions to make the Optima accessible in right-hand drive.
Therefore, why should the local distributor, whoever it may be, invest in the Kia brand when Kia itself isn’t prepared to commit to producing additional right-hand drive vehicles? They wouldn’t have any ownership in the Kia brand anyhow.
When compared to the extremely practical Honda HR-V and the extremely affordable Proton X50, the Kia Seltos doesn’t provide anything particularly noteworthy. The Hyundai Kona looks more fashionable.
The new Kia Carnival appears very upscale, but it will be up against an excessive amount of cheaply restored Toyota Alphards in the market. It is clear which of the two products consumers will favor.
The Kia Sorento and Kia Sportage are the only options remaining, so why would Bermaz Auto harm its own Mazda CX-5 and Mazda CX-8?
In contrast to Peugeot, Kia is vying for the same demographic of clients as Mazda.
Peugeot, at least, can always position itself as a European option, and for a select few buyers, it still has significance even though it is a Peugeot. Peugeots are recognized for having the most attractive interiors among all European automakers, yet they aren’t Volkswagens.
It is financially feasible for Berjaya/Bermaz to stretch out the negotiations. They didn’t actively seek out the business, so they stand to gain nothing even if the discussions fail.
For more than ten years, the Kia brand has struggled in this country, and the new distributor will have to spend a lot of money before they can start turning a profit.
Kia now has the initiative. Malaysians should inform Kia that we do not care about their products if Malaysia is not significant enough to them.
It is difficult to change people’s opinions about Korean cars, thus Kia needs to examine themselves what they have done to support its local distributor throughout the more than 15 years that Naza Kia Malaysia has tarnished the Kia name.
Therefore, it shouldn’t anticipate that a new local distributor will wave a magic wand and solve all of these issues. Given that both parties contributed to the problem, if Kia wants to rebuild the brand’s reputation in this country, it will have to get its hands dirty and cooperate with the new local distributor.
Keep in mind that Kia maintains a local company in Malaysia. The 50-story Naza Tower is home to a modest office for Kia Malaysia, which is not to be mistaken with Naza Kia Malaysia. Kia Malaysia is owned entirely by Kia Motors Corporation.
How did Naza Motors fare?
For the Naza group, IT in the automobile industry means back to fundamentals. The group’s automotive division is once again centered on its Mercedes-Benz franchise after giving up its Kia and Peugeot franchises.
In addition to the Mercedes-Benz brand, the business also owns the franchise rights to Ducatti motorcycles and other high-end luxury brands including Ferrari and Maserati.
Mercedes-Benz is the only premium brand to have consistent sales of 10,000 units or more per year when compared to the other luxury brands. The Naza group is one of the top three retailers for the high-end German brand.
The group also benefits from having a unique relationship with the Mercedes-Benz principal in Germany.
Officials from the sector claim that Mercedes-Benz Malaysia Sdn Bhd, a fully owned subsidiary of Daimler AG in Germany, imports the vehicles using franchise approved permits (APs) from the Naza group. The top two Mercedes-Benz dealers in the nation, Cycle & Carriage Bintang Bhd and the Hap Seng group, are then given access to the vehicles.
“After giving up the Kia and Peugeot franchise, the Naza group is currently primarily supported by its Mercedes-Benz operations. According to a representative of the automotive sector, the Naza group handles the importation of almost all Mercedes-Benz vehicles from the brand’s headquarters in Germany.
“The franchise AP industry is no longer as profitable as it once was. Nevertheless, because Mercedes-Benz is a well-liked brand among luxury models in Malaysia, it continues to provide the group’s automotive division with a constant revenue flow, the official continues.
The late Tan Sri SM Nasimuddin SM Amin oversaw the Naza group in the 1990s when the link between the Mercedes-Benz founders and that organization first began. As an importer of new, reconditioned, and used cars, Nasimuddin founded the company.
Later, after being involved in the local assembly of foreign automobiles, the business invested in the construction of an assembly factory at Gurun, Kedah.
When an AP was a highly sought-after document in the 1990s, the group was the “the preferred car dealer for anyone wishing to import vehicles into Malaysia. By 2004, other bumiputera motor dealers had joined the AP industry, and the government subsequently established franchise APs for dealers who had developed a unique bond with their foreign principals.
In addition to offering luxury automotive models, the Naza company also owns the rights to the Suzuki brand, which meets mid-range demand. To this purpose, SM Nasarudin SM Nasimuddin, executive chairman and CEO of the Naza group, declared earlier this month that the company will sell Suzuki vehicles.
Suzuki, a Japanese brand, has more traction than the South Korean-made Kia and the French-made Peugeot. Historically, Japanese models have been more well-liked on the local market than South Korean and European models because they are simpler to maintain.
Price must be competitive for Suzuki to be a mass market vehicle, though. Suzuki models are currently imported through gray importers, and their costs are high when compared to models from other automakers in the same market.
“Due to their CKD (completely knocked-down) activities in the area, some non-national Japanese automobiles in the same sector are selling for less money. According to a representative close to DRB-Hicom Bhd, Naza won’t be able to compete on price unless it produces the Suzuki automobiles domestically.
Since giving up the Suzuki franchise five years ago, DRB-Hicom has been occupied with handling the distribution of Proton automobiles, which are experiencing a resurgence in sales thanks to their newest models.
In 2018, the Gurunit manufacturing facility was transferred from the Naza company to the Groupe PSA of France. The latter owns a 61.4 percent share in the manufacturing facility, which serves as its regional production hub and produces and sells European brands including Peugeot, Citroen, and Opel.
The factory, which is under capacity and has space for Suzuki model manufacturing, is thought to be in operation. Groupe PSA might not be eager to let the plant construct rival models, though.
The Naza group is also heavily involved in the delivery and maintenance of police patrol cars and other vehicles used by the government sector. A joint venture between Naza and Berjaya was said to have secured a letter of intent to handle the government fleet of vehicles in January of last year.
The joint venture was intended to take over from Spanco Sdn Bhd, whose 25-year concession came to an end in December 2018 and had subsequently been renewed every six months. Furthermore, it was said that the Naza-Berjaya JV would take over after Spanco’s extension until June 2020.
However, since the Pakatan Harapan administration was toppled in February 2020, nothing has changed about the fleet management contract.
The Naza group has extensive interests in property development projects in Kuala Lumpur and lesser-known parts of Penang aside from the automobile sector. However, the real estate market has been stagnant since 2017, and it does not yet appear to be having an effect on the group.
Will Kia Seltos ever arrive in Malaysia?
The B-segment SUV has been around since 2019, however the Kia Seltos was only recently introduced in Malaysia. According to analyst forecasts from RHB Investment Bank and Kenanga Research, a mid-life refresh is therefore overdue, therefore it should come as no surprise that the facelifted model is predicted to debut in the market in the fourth quarter of 2022.
To be fair, the Seltos was mentioned as an entirely new model in distributor Bermaz’s timeline, but that seems improbable given that the vehicle is still fairly young and hasn’t undergone any cosmetic changes. The delay likely allows for the transition to the facelifted car. The car was initially scheduled to start CKD local assembly in the second quarter, but we haven’t heard anything about it since.
The 136 PS 1.6 liter turbodiesel that is now available in some regions will be replaced by a hybrid option shared with the Niro, according to rumors from South Korea. Kia has not yet provided any information about the redesigned Seltos. Given that the Niro is also scheduled to make its introduction around the same time with the same engine, this would fit into Bermaz’s focus on electrification for the Kia brand.
The 1.6 liter normally aspirated and turbocharged petrol engines, the former of which was previously available here and produces 123 PS and 151 Nm of torque, will probably remain in the lineup and likely be updated to the most recent Smartstream variants. Additionally, the front and back fascias will likely be drastically modified to conform to Kia’s most recent Opposites United design language.
Who inherited Kia?
The Hyundai Motor Group, which includes the passenger car brands Hyundai and Genesis, also owns Kia. Together, they currently rank behind Volkswagen, Toyota, and General Motors as the fourth-largest automaker in the world.
- As a manufacturer of steel tubing and bicycle parts, Kyungsung Precision Industry was established in 1944 and is now the oldest automobile manufacturer in South Korea. It also produced the Samchully, Korea’s first locally constructed bicycle, in 1951. In 1957, it started producing Honda motorbikes under license, and in 1962, Mazda vehicles were also produced under permission. The alliance with Mazda included automobiles in 1974. Kia also produced Fiat and Peugeot vehicles under license in the late 1970s and early 1980s. Only after it began producing automobiles in collaboration with Ford in 1990 did its own brand begin to gain traction (and therefore Mazda, which Ford used to control).
- When Kia Motors America was established in 1992, the brand entered the fiercely competitive US market. Some of the early models that contributed to the brand’s establishment included the Sephia and Sportage.
- When Kia filed for bankruptcy in 1997 under the shadow of Asia’s financial crisis, Ford made an attempt to raise its modest ownership position in the automaker. Ford, however, lost out to a major Korean automaker! In 1998, Hyundai acquired a 51 percent share in Kia and gained control of the firm. While Kia is a division of their shared parent company, Hyundai Motor Group, Hyundai Motor Co. now holds a 33.88 percent ownership.
- When Kia strengthened its focus on Europe and engaged former Audi designer Peter Schreyer as the company’s design manager, a significant turnaround occurred. This gave rise to Kia’s “Tiger-Nose” design philosophy, which had a similar impact on that brand’s global sales as Hyundai’s Fluidic-Sculpture had on its. Additionally, Schreyer was promoted to President of the Hyundai Group and Chief Designer as a result.
- Over 3 million automobiles were sold by Kia worldwide in 2018, and the company is one of the fastest-growing brands in numerous international markets. Although it is a sister brand of Hyundai, the two firms’ front-end operations remain distinct, and they engage in direct competition with one another over similar items in the same market.
- Hyundai products and the complete Kia product line share platforms and components. On any car, however, there is no cross-badging or evident part sharing. The Soul, Optima, and Sorento are three of its most well-liked products. We’ll probably get the Rio, Picanto, Sportage, as well as some new compact cars made just for India.