Introduction and analysis of the success Of KIAMOTORS
According to Kia Motors, the name “Kia” derives from the Sino-Korean words ki (“to come out”) and a (which stands for Asia), it is roughly translated as “arise or come up out of Asia” or “rising out of Asia”.
South Korea’s oldest car company, Kia was founded in 1944 as manufacturer of steel tubing and bicycles. In 1952, Kia changed its name from Kyungsung Precision Industry, and later built motorcycles, trucks and cars. Starting in 1986, in partnership with Ford, Kia produced several Mazda derived vehicles for both domestic sales in South Korea and exports into other countries. These models include the Pride (based on the Mazda 121) and Avella, which were sold in North America and Australasia as the Ford Festival and Ford Aspire.
In 1992, Kia Motors America was incorporated in the United States. The first Kia-branded vehicles in the United States were sold from four dealerships in Portland, Oregon in February 1994. Since then, Kia expanded methodically one region at a time. Dealers in 1994 sold the Sephia, and a few years later the United States line expanded with the addition of the Sportage.
However, Kia’s bankruptcy in 1997, part of the Asian financial crisis, resulted in 51% of the company being acquired in 1998 by South Korean rival Hyundai Motor Company, outbidding Ford Motor Company which had owned an interest in Kia Motors since 1986. Subsequently, however, Hyundai has divested some of its ownership of Kia Motors, and currently Hyundai Kia Automotive Group owns less than 40% of the company.
Kia Motors Europe (KME) is the European sales and marketing division of Kia Motors Corporation (KMC). In 2007 KME moved from its previous location at Hauptstrasse 185, Eschborn, Frankfurt to a new purpose built facility adjacent to the Messe in Frankfurt city centre.
From 1995 to 1999 Kia produced left and right hand drive versions of the Sportage SUV at the Karmann factory in Germany. From 1999 until production of the model ceased in 2003, all Sportage production reverted to South Korea.
Kia began importing cars to Europe in early 1991, initially selling just the Pride mini-car. It initially proved popular with buyers but sales fell towards the end of the decade and the end of production was finally announced in May 2000, with its successor – the Rio – not going on sale for another year.
The European range expanded in 1994 when Kia began importing the larger Mentor, a range of medium sized hatchbacks and sedan which were marketed as cheap and well-equipped alternatives to the likes of the Ford Escort and Vauxhall/Opel Astra. A facelift in 1999 saw the Mentor name retained for the saloon, but the hatchback was renamed Shuma. These models remained on sale until 2004, when the newer Cerato was launched and gave Kia one of its first serious competitors for mainstream brands.
The Sportage SUV range has been popular across Europe, but since 2002 Kia has gained more sales in this market thanks to the launch of the larger Sorento.
Kia did not enter Europe’s large family car market until the launch of its Credos four-door sedan in 1999. This car was similar in size to the Ford Mondeo, but on its launch was actually cheaper to buy than the smaller Focus. It had a spacious interior, large boot, competitive asking price and high equipment levels, but it had little more appeal to sway buyers away from established European brands like Ford Motor Company, Vauxhall/Opel, Renault and Peugeot. Its successor, the Magentis, launched in 2001, was still nowhere near as popular as Kia might have hoped it would be.
Kia entered the MPV market in 1999 with the Sedona. On its launch, it was the cheapest full-size people carrier on sale in the United Kingdom. 2004 saw the commencement of European imports for the Kia Picanto city car. It has proved very popular with budget buyers in most of Europe.
As of 2007, Kia has been importing cars to Europe for 16 years. On its arrival, just one model was being sold. The range has gradually expanded over that time so the marque has a competitor in just about every sector except for the luxury and sports market. Sales of its products have so far failed to match those of established European brands, but current sales records have been impressive for a marque which only arrived in Europe at the start of the previous decade.
Introduction of Public Star Auto
Mr. Palan Ramasamy founded this business in the year 1995. Originally, he started this business as him doing general insurance, and he also has been a life insurance agent in Great Insurance Life for 27 years. He is a group sales manager for 17 years and still maintaining till this moment. After that, he started exploring used car department 15 years back and KIA MOTORS sales for 7 years. He also owns a KIA service centre for the past 5 years. The headquarters of Public Star Auto is located in Seremban while their outlets are in Bahau and Port Dickson. Their service centre is situated in Seremban.
Public Star Auto sells all types of KIA car models such as Sportage & Sportage NGV, Optima &Optima NGV, Citra & Citra NGV, SPECTRA 5, Ria & Ria NGV, Sorento, Spectra and Suria with warranties for either 5 years or 125 000km. In addition, they sell Pregio and Rondo on loan for monthly loan from RM 853 and RM 930 respectively. He started this as a family business with his three brothers. They have 3 senior staff to handle the general insurance. Until now, he had invested 20 billion in this organization. Mr. Palan have full of confidence in the development of his business as he tells us he is going retire in this few year time and allow his son to run the organization. Besides, NAZA KIA wins best dealers in Asia Pacific. In proving of their excellence, in Malaysia, Public Star Auto is one of the dealers scored sufficient points to be accorded “A” which KIA MOTORS recognizes as being “Platinum Dealer”. This is one of the remarkable achievements achieved by the organization.
KIA MOTORS –
As an organization that always wants to strike for the best, managing director of the Public Star Auto believes mission statement plays an important role in maintaining their success. For him, mission statement serves roles as the present purpose of the organization and provides direction where the organization is heading.
For Public Star Auto, their mission is to be committed to cultivate friendly environment with customers to create a good relationship for excellent sales. Mission statements are annually reviewed to make some adjustments so that their mission statement is not out date. The managing director of Public Star Auto will conduct a brief meeting once he reviewed mission statement so that his employees are clear with the new mission statement and enable to follow it. As for their vision, Public Star Auto will be the top sales in Seremban by 2009.
Public Star Auto management never fails to do planning to run their business smoothly. Planning is done according to the current demand and wave of the economics. For the long-term planning of Public Star Auto, they are concern about the inverse investment. They realized that normally an organization will reach the maximum benefits in 25 year. After reaching the maximum benefits, the branch manager will take around 20% cash & capital to make new investment. He believes that investments minimize the loss of the organization. For example, he will take the capital to invest in the share market to increase their core value.
For long term planning, Mr. Palan is planning to open another outlet in Nilai in near future. This is to enhance their profit in the sales as the managing director believes that car sales business will always grow. This plan is being discussed by the top managers to make this new plan will bring benefits to the organization. In his own assumption, he is planning to open the new branch in Nilai in another 5 more years. By clear and defined planning, he believes this strategy will be another core factor in strengthening his business.
In addition with their long term planning, Public Star Auto has proposed to the KIA MOTORS management to manufacture a new model of KIA car using NGV to meet demand of the customers. With this new plan, he believes sales of KIA cars will increase as many people nowadays use cars with NGV. This long term planning will benefits the organization if the KIA MOTORS management agrees to do.
Next is the short-term planning, the management emphasizes on building a strong relationship within the seller and customer. Their main plan is to be able to create an understanding and harmony environment with the customers. With this, they provide financial loans to the customers to reduce their burden while making sure the customers will be able to buy cars. For example, they usually will plan to organize a small buffet occasionally by inviting their customers’ families to have their breakfast in order to build relationship with their customers. This plan is occasionally done depending on the clear financial statement.
The second short-term planning for Public Star Auto is to pursue retrenchment strategy whenever it is necessary to be applied. They cut down all the unwanted operation cost and unnecessary wastage in the organization. In addition, managing director of Public Star Auto cuts down top manager’s salary as they can still be able manage their family compared with those with low salary employee. This plan is effective the growth of business is slow and this plan is also to backup the slowdown experiencing by the organization.
Furthermore, when they bring out a new series car, top managers have the responsibility to plan how to attract the consumer. . Thus, it makes sure the director of Public Star Auto has extra time to make strategy planning. One of the ways they plan to attract attention of people is by organizing activities. The management organizes special activities like lucky draws to attract customers’ attention to their showroom. This will be a great opportunity for the organization to showcase their new series of car.
Besides that, they will provide gifts or free service if they attend the activities. This will be another way to build relationship with customers. The other way to promote the new series of cars is by frequently advertising so that the public be aware of the new arrival. Public Star Auto will advertise about the new arrival of car in flyers which is distributed around Negeri Sembilan.
To attract customers’ intention towards KIA cars, the management does several planning so that KIA cars are preferred among the public. The management does the planning by discussing with the managing director so that they come out with a best solution. They will plan to organize road shows in places where it is a famous spot in Seremban such as Jusco, Giant Senawang and Terminal 1. This plan will be implemented especially when there is festive season as it will be more effective.
Based on the observation made by the Public Star Auto, only 60% of the Malaysian can legally buy a car. However, the government has open too many licenses for the car companies to operate in Malaysia. It causes many competitors in this industry. Thus, Public Star Auto prefers on customer mental serviced. By this, they can ensure public has good relationship with the organization and benefits them for a longer term. They are keen to provide an excellent service to make sure customers have good interest and perception of KIA cars; otherwise they will refuse to purchase KIA cars.
Under the organizing process, Public Star Auto is well-organized with the current hierarchy as below.
The Director of Public Star Auto divided and structured the organizational structure into 4 departments. The departments are consisting of workshop manager, accounts & administration department, store department and sales department. Under the workshop department, there are administration and accountancy department, store assistant department, service advisor department, and technicians departments. Under the administration and accountancy department, there are accountant executive and accountant executive. The department will handle all the account statement given by top management. Next for store department, there is a store executive who is in charge of the outgoing and incoming stocks. The staff will ensure every month of the resources enough such as the car. There is a technician executive and a supervisor that supervises the technicians. The workshop manager has a wide span of control because the head of the workshop department have to be in charge of another 4 departments under it.
Normally the task will be delegated to senior staffs who have been working for 25 years. Under the director, there is 3 staff under his control to complete their job. Besides that, Public Star Auto sellers have wholly managed by the managing director as he is the franchise holder. When they receive the daily task given by the director, they need to settle the task before go off the duty. It’s to make sure very thing done and no procrastinate to build out an efficiency & effectiveness work. For definite the procrastinate, its mean the people fear of something or lack or confident when receive the task.
The organization accounting department is lead by a capable accountant. She has a Human Resource (HR) person working under her control. This organization has clear rules and a procedure to follow. It is to make sure they achieve their vision and mission. Under the supervision it makes sure no any cheating and run the cash flow properly.
Furthermore, decentralization plays a role in this organization. The director will give the authority to subordinate in decision making. The sellers are not tied with rules and regulations in terms of promoting the cars. For example, the seller can choose to promote the cars in public places such as shopping complex or in cooperate companies. That is one of the ways to motivate and increase their self confident while promoting the car because they have authority to decide the ways to promote cars.
In addition, Public Star Auto is a departmentalized organization. The director of Public Star Auto will set target for every department in half year. Every department might implement the objective given by top management in their own way without receiving permission from the top managers.
Mr. Palan uses two types of leading style to lead his organization. That is autocratic style and democratic style. For autocratic style, the director will set the rule that the statement of profit and loss for every month must be submitted before 15th of each month. The second autocratic style they using is if the employee want to take leave, he or she need to make the request before 3 day.
For democratic style, when the new series car is coming, the director will hold a meeting for discussing with employees how the advertisements & the sales should be. The employee has the chance to give some suggestions due to their experiences and that also is one of the democratic styles that the director has used. The manager also gives the promoter authority to discount for the customer within the range of percentage.
Public Star Auto management will motivate the subordinate by mentally & physically. For mentally motivation, every Saturday the manager will hold a meeting for the entire employee to give any feedback or suggestion at least 1 or 2 hour. It motivates employees because they feel that they also are involved in decision making. As well as the director receive the feedback given by employee; the director will share some life experience to employee and education teaching them to grab a meaningful life. It’s also improving the relationship between managers and subordinates. He checks the daily performance of the organization. The staff reports the daily sales and cash flow to maintain the performance of the organization. The managing director will conduct a meeting to motivate his subordinates so that they will improve their performance.
The manager uses few ways to improve their performance. The first method is manager send those excellence employees go oversea for training. It can gain experience other than their job while they get training. The second method is exchanging the employee from branch to branch for certain period. It might refresh their mind rather than constant in the same work environment. The third way is the senior employee takes turn training the new employee within the company. It’s cut the operational cost of training because all the activity run in the company and let the new employee to know how the seniors control the problems.
For the physically motivation, firstly, Mr. PALAN have always pay overtime to the subordinate. That is avoiding creating the Theory X in organization. The example of Theory X is the employee try to avoid responsibility or the employee dislike the work and other words the employee must be controlled, coerced and threatened with punishment by the supervisor.Secondly, at every end of the year, Mr. PALAN will gives reward to some of the excellent employee like who can sell how much car per month.
For maintaining the performance of staff, every day before the employees leave office, their tasks or documents must be sent and checked by the supervisor. It is to make sure the subordinates come to the company with a fresh and clear mind the next day. It is also one of the ways to prevent procrastination. For example, the employee fears of failure because if the employee fails to finish the task on time the manager has the power of punishing the employee by assigning the boring task or unpleasant work.
Every month, the director will have meeting with the salespersons personally to discuss about the sales of car per month. This meeting is held intentionally to discuss the problem faced by the salespersons to sell car and problems in meeting the target of organization. Furthermore, this opportunity is used to find the solution to the issues dealt by the salesperson and ways to enhance the market demand.
Besides that, they also have peer observation; the subordinate can discuss about the way to converse with customers to make it improve. The subordinate can give some advisement or suggestion to each other for improvement. In addition, statistics of sales of every month is issued by the sales supervisor. This is in order to compare number of sales of car of each month with the previous sales. By doing this, the organization gets a clear picture of their performance and knows their target.
For addition, we will consider the feedback because a control that prevents anticipated problems before actual occurrences of the problem. If any feedback comes from the customer, we will take some corrective action to improve our service with mentally and physically.
Last but not the least, to prevent financial crisis, the director will direct the accountant to ensure every term of cash flow in the right way as planned. Every statement of profit and loss of every month must be submitted before 15th of each month. The manager commitment to maintaining a positive working relationship with government and immigration authorities ensures the smooth processing of every single statement or approval.
Conclusion & Recommendation
From its very humble beginnings as a manufacturer of bicycle parts by hand on the outskirts of Seoul, Korea, KIA Motors has emerged as the driving force behind the Korean motor vehicle for the last six decades, laying claim to the production of the country’s first automobile as well as Korea’s first automobile export. The word Kia is derived from the Chinese characters KI, meaning to “arise or come up out of” and a, referring to Asia. So when put together, KIA means to “arise or come up out of Asia”.
First and foremost, MR. PALAN RAMASAMY is also under doing this business through franchises system. Through his history, He has started founded in the year 1995. Generally, this business started as him doing general insurance and gradually he has been a life insurance agent in Great Insurance Life for 27 years. He is a group sales manager for 17 years and still maintaining till this moment. After that, He explored used car department 15 years back and selling KIA cars for 9 years.
After the interview, we assume that using democratic & decentralization is more efficiency because it lets employee to involve in participation and control the quality of the service. In addition, Public Star Auto management also plays the role in delegate authority. Each of the promoters will have appointed with a mentor or those routine tasks also will delegate to them such as free hand to promote the new series car.
For maintain the performance of staffs and prevent procrastinate, all the staffs need to prove their task to the manager before they leave. Besides, MR. PALAN RAMASAMY also organize his business through short-term planning, the management emphasizes on build out a strong relationship within the seller & customer.
Today 60% of Malaysian owns cars. In addition, Public Star Auto is a departmentalized organization. The director of Public Star Auto will set target for every department in half year. Every department might implement the objective given by top management in its own way without receive permission.
MR. PALAN also uses 5 techniques for overcoming resistance. He uses participation techniques by motivating his employee. He usually give advise to his employee by telling “A SUCCESSFUL BUSINESSMAN MUST HOLDS THE PRINCIPLE “ABCD” which are (A=ability, B=believe, C=committed, D= do it).
For ability, we must always measure our ability before we start to do anything. It prevents the failure because we can not work over our ability. The next is believed. We need to believe people first after only get believe from other. Committed task might create an effective & effectiveness job. It’s let the manager have extra time to do strategy planning. After planning we must do it. We must take action rather than stand or stop over there and do nothing.