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Kia Motors SWOT & PESTLE Analysis

ID : 52392153| May 2018

COMPANY PROFILE -Kia Motors

Business Sector :Automobile

Operating Geography :Seoul, South Korea, Asia

About Kia Motors :

Kia motors headquartered at Seoul is South Korea’s one of the leading automobile manufacturers. Kia was first established in 1944 and was the manufacturer of first domestic cycle of Korea. Kia motors has a wide spread global presence from Korea, Mexico, India and many other countries. Kia is a subsidiary of Hyundai with 33.88% stake and deals with automobile manufacturing. The core values lie in strengthening our own corporate stability and promoting responsible management. The company has sold more than 3 million vehicles per annum worldwide. The ‘design’ is placed by Kia at the very core of its strategy and has reformulated its philosophy to achieve this goal. Kia has 51357 employees in its organisation both domestic and worldwide.

For the automobile business, the vision statement is ‘Providing a new space that makes life more convenient and enjoyable by realizing superlative mobility based on innovative people-oriented, eco-friendly technologies and comprehensive services.’

Kia Motors Revenue :


53,536 KRW Billion FY2017
52,713 KRW Billion FY2016

Competitive Analysis of Kia Motors

SWOT
PESTLE
The SWOT analysis for Kia Motors is presented below:
Strengths
Weaknesses
1. Strong Financial Performance and growth Strategy
2. Diversified product portfolio
3. Strong global presence
4. Strong innovation and creativity platform
5. Product design and warranty
1. Lack of scale compared to competitors
2. Recalls of vehicles due to failures
3. Low returns with respect to cost of capital
4. Wage disputes with Union and impact
Opportunities
Threats
1. Positive growth for electric vehicle segment
2. New scope of entering new markets
1. Intense market competition
2. Exchange rate and currency fluctuations
3. Trade wars and prolonged diplomatic tensions
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Detailed SWOT Analysis of Kia Motors

 

Strength

1. Strong Financial Performance and growth Strategy: Kia Motors has been a consistent performer in terms of revenue with reported revenue in 2016 being 52713 billion Won and growing to 53536 billion Won in Q4 2017. The reported growth over 2016, is 1.6 %.There was an increase in sales in overall vehicle segment over the year also. The sales grew by 8% in Europe. Kia Motors Corp's ROIC % is 1.99%.With the completion of their new plant in Mexico, boasting an annual production capacity of 400,000 units, they have increased their global production capacity of 3.55 million units. In 2016, the reported operating profits went up by 4.6%.Kia Motors primary strategy lies in entering to advanced markets, expanding Chinese market and exploring small to mid sized market. The Strategy lies in enhancing the business operations and product identity by focussing on production(SCM), quality, sales and operations

2. Diversified product portfolio: Kia Motors Company has multiple products under its belt. With new addition of sports vehicles to electric hybrid vehicles, the organisation has followed an aggressive growth strategy over past few years. Even the company has confirmed that it will be launching new vehicle segments in upcoming years to increase its market share to more than 30%. By launching more electric hybrid vehicles the company is targeting to strengthen its presence in the eco-friendly car market. Further, the company is planning to venture into Indian market by partnering with Hyundai

3. Strong global presence: Kia Motors has developed its global presence over the years. Kia Motors has been expanding its global footprint by using a strategy of comprehensive localization. Starting in 1944 at Korea, the company has diversified its presence across strong markets like Mexico, United States, Europe, China. The company has experienced a growth of 3.5% in US market, 13.1 % in Europe market and a 14.8% growth in China market. In 2016, Kia ranked 69 as a global brand with a brand value of 6.3 billion USD. After being bought by Hyundai, the global presence is expected to strengthen further. The brand slogan of Kia motors is “Power to Surprise”, which fairly suggests their growth strategy over the years. In 2016, Interbrand, a major brand consulting company, valued the Kia Motors brand at USD 6.3 billion, up 12% year on-year. Kia Motors ranked first among both premium and non-premium brands in J.D. Power & Associates,2016 Initial Quality Study in June, receiving recognition for its strong product competitiveness. Apart from this, in 2016 Kia Motors ranked fifth in annual auto reliability survey

4. Strong innovation and creativity platform: With a strong interest in electric mobility market, Kia Motors are looking forward to enter the green car technology market and are targeting to become the global leader in low emission car market by 2020.Kia is investing huge sums in developing in research and development activities to create a new line of decreased CO2 emissions with platforms like hybrid and plug-in hybrids to battery-electric and fuel cell electric vehicles. Kia has also announced its investment in creating partially autonomous vehicles by 2020 to creating fully autonomous vehicles by 2030. Investment by parent company Hyundai is recently for technologies like ADAS, Lane assists, navigating traffic jams and parking systems. On creativity and innovation side, Kia has developed its strength in design area. A key element of Kia’s designs is ‘The Simplicity of the Straight Line’, which they have embedded in their design management systems. Apart from design they have also applied the philosophy in customer communications, for example the app which provides an interior tour of the Optima vehicle by scanning the QR code

5. Product design and Warranty: Keeping in mind the current state of market Kia has focused its product strategy by concentrating in its design and thus has developed its models in different designs hence providing a good assortment for its customers. They have developed models in sports segment with high end technologies and placed the products at a relatively low price, thus it has boosted the sales. Similarly, the warranty period is for more than 5 years which has improved its preference in the minds of customers which has positioned the company in a better place than the competitors

Weakness

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Opportunity

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Threat

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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?
References used in Kia Motors Analysis Report

1. http://www.kia.com/worldwide/about_kia/investor_relations/annual_report.do

2. http://pr.kia.com/en/company/ir/ir-library/business-results.do

3. http://www.kia.com/worldwide/about_kia/investor_relations/financial_highlights.do

4. http://www.kia.com/worldwide/about_kia/brand/brand_identity.do

5. https://www.gurufocus.com/term/wacc/KIMTF/WACC/Kia+Motors+Corp

6. http://www.toddsofcampsie.com/news/kias-2020-road-map-innovations-for-the-future/9202/newsdetail.aspx

7. https://auto.ndtv.com/news/kia-motors-loses-landmark-wage-dispute-1744478

8. https://www.autocarindia.com/car-news/kia-announces-india-entry-404787

9. http://english.yonhapnews.co.kr/news/2017/09/17/0200000000AEN20170917000500320.html

10. https://www.cisco.com/c/dam/global/nl_nl/assets/docs/Connected_Manu_Intro_Final.pdf

11. https://www.oav.de/fileadmin/user_upload/2_Termine/Korea_Sued/4_KAMA.pdf

Copyrights and Disclaimer

Kia Motors SWOT and PESTLE analysis has been conducted by Soumaya Adhikari and reviewed by senior analysts from Barakaat Consulting.

Copyright of Kia Motors SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

Kia Motors SWOT & PESTLE Analysis
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