Contents

Company Profile..........................................................................................................................................2
Mission....................................................................................................................................................2
Vision.......................................................................................................................................................2
Core Values..............................................................................................................................................3
Company and Industry Overview................................................................................................................3
History.....................................................................................................................................................3
Auto Policy 2016-2021.............................................................................................................................4
The Rebirth of KIA....................................................................................................................................4
Lucky Motors Portfolio............................................................................................................................5
Brand Overview...........................................................................................................................................5
Sportage History......................................................................................................................................5
Product, Price, Place and Promotion – The 4Ps.......................................................................................6

Company Profile
Mission
We At Kia Believe That Movement Inspires Ideas. And That’s Why We've Created the Space For You To
Get Inspired And More Time To Bring Your Ideas To Life.

Vision
we will move beyond being a traditional car manufacturer,
to becoming a mobility brand.

One that understands consumers’ mobility needs

in terms of products, but also in terms of services,
providing convenient solutions that respect everyone’s most valued resource, time.

It’s not just something we say,

but a purpose we will pursue and act upon,
in everything that we do.

Company and Industry Overview

History
Kia Corporation is a South Korean multinational automobile manufacturer headquartered in Seoul,
South Korea. It is second to Hyundai in being the largest automobile manufacturer for South Korea.
Hyundai and Kia, although operate independently, share the relationship of parent and daughter
corporations. In 1997, Kia filed for bankruptcy. That is when Hyundai purchased the auto company in
1998 to keep it afloat. Both companies are therefore related but have completely different philosophies
and compete in the manufacture of automobiles.

Kia first launched in Pakistan during the mid-1990s when local production of automobiles kicked off.
During the early-1990s, the automobile industry in Pakistan was highly regulated. As the industry was
deregulated, the decade witnessed a huge boom in auto production. Nationalization was favored over
privatization, and players like Suzuki Toyota and Honda started gaining traction. Most of the established
automobiles of that time were phased out. Mazda, Mitsubishi, and Nissan had a long history in Pakistan,
but huge investments in Japanese automakers by the Japanese themselves led a shift in choices towards
Suzuki, Honda, and Toyota. In 1991, Japan acquired 40% shares of Pak Suzuki and in 1993, Indus Motors
company began production of Toyota Corollas. In 1994, Pakistan Automotive Manufacturers Association
(PAMA) was formed, and Honda Atlas introduced manufacturing of Honda Civic. Besides these Japanese
automakers, Kia was another name which emerged into the market in mid-90s. The first models which
were introduced to the market were 1000cc Kia Pride hatchback and 1-ton pickup Kia Ceres. Naya Daur
Motors (under the Tawwakal group) was the first to introduce these vehicles in 1994/95.

During its first launch in Pakistan, KIA developed an utterly bad impression as court filings suggested that
the company took over PKR 800 million as bookings from 16,000 people and delivered only a few
hundred vehicles before going bankrupt, as it did worldwide. Despite the tarnished reputation, Dewan
Farooque Motor Company (DFML) made agreements with Hyundai and Kia to assemble and sell their
vehicles in Pakistan in 1998/99. The partnership proved fruitful for a period as a manufacturing plant
was built in rural Sindh at a cost of PKR 1.8 billion. It was the first automobile plant in the country to
have robotic paint machines. The plant boasted a production capacity of 10,000 vehicles per year which
allowed DFML to make 95,429 vehicles between 2000 and 2011. Among these were popular names like
KIA Spectra, Sportage and Hyundai’s Santro. It also sold 50,000 Shehzore trucks, which dominated the
ton-truck category. The then CEO of DFML believed the automobile industry in Pakistan was revived due
to their efforts and investments.

Under DFML-Kia agreement, in year 2000, the first vehicle to get rolled out to the market was 1300cc
Sedan KIA Classic, also known as Pride-B in the global markets. This was followed by the launch of
Hyundai Santro Plus, the first locally assembled 1000cc hatchback other than Suzuki. A year later, KIA
rose to its peak with the launch of new, more stylish models including KIA Spectra and Sportage. These
vehicles became instant hits.

For a few years DFML enjoyed impressive sales and turnovers but then things started to go downhill.
Dewan acquired Pakland Cement in 2004 for PKR1.1 billion in cash soon after which the group started
posting losses. These cash problems soon started cascading into operating problems for the entire group
in just 24 months. Dewans were eventually declared defaulters of PKR 40 billion and vanished
completely from mainstream news. With that, the first episode of KIA in Pakistan came to an
unexpected end.

The comeback of Kia motors in Pakistan was courtesy of the vast conglomerate, Yunus Brothers Group.
For many years following Kia’s initial exit from Pakistan, it was inconceivable to enter the Pakistani
automotive market. A lobby was established by three dominant Japanese car manufacturers – Suzuki,
Toyota, and Honda. This changed after the introduction of the Auto Policy 2016-21

Auto Policy 2016-2021

Implemented on the 21st of March 2016, the primary objectives for the 5-year policy were to break the
monopoly of the three Japanese companies in the market, generate healthy competition, shorten the
delivery period, eliminate own/premium, increase localization, bring down car prices, and improve the
quality of products offered to the customers. The policy aimed at providing tax incentives to new
entrants and promote consumer welfare. The existing three car manufacturers were not entitled to
these benefits.

The incentives as per Auto Policy 2016-2021 were as follows:

 A major incentive for the new investors was reduced 10% customs duty on non-localized parts for
five years against the prevailing 32.5%. For investors, the duty was to be slashed by 2.5% to just 30%
from the fiscal year of 2016-17.
 The localized parts can be imported by the new entrants at 25% duty compared to the prevailing
50% for five years.
 One-off duty-free import of plant and machinery allowed for setting up an assembly and
manufacturing facility. The policy also permitted import of 100 vehicles of the same variants in the
form of completely built units (CBUs) at 50% of the prevailing duty for test marketing after the
groundbreaking of the project.
 In the CBU category, customs duty on cars up to 1,800cc engine capacity was to be reduced by 10%
for two years – 2017-18 and 2018-19. This was applicable to the existing players as well and would
encourage reduction in car prices. Also, a single duty rate was applied to the localized and non-
localized parts after 5 years of the new policy. The duty structure will continue for 7 years for the
new investors.
 For revival of sick or non-operational units, the non-localized parts would be imported at 10% and
localized parts at 25% duty for three years for the revival of a sick unit. The government, however,
did not change its policy for used car imports, leaving consumers with a limited range of choice until
new brands of good quality were produced in the domestic market.

The Rebirth of KIA

Cashing in on the incentives promised by the government of Pakistan through the Auto Policy, the
Karachi-listed Lucky Cement (part of YBG) initialized an investment decision of PKR 12 billion to set up a
plant in order to start manufacturing and assembling Kia vehicles in Pakistan. The Motorspartnership
was established in 2017 between YBG and Kia motors to form Kia Lucky Motors.

Without any further ado, the organization set out to build an advanced manufacturing plant, which was
completed in just 18 months. The ideas were quickly put to practice in August 2019 with the launch of
the Sports Utility Vehicle (SUV) Sportage, followed by the hatchback Picanto shortly after. The CEO, Asif
Rizvi stated:

“We have placed really strong emphasis on quality and have installed pieces of equipment that
will enable us to produce exceptional cars and take the entire Pakistani automotive market to a
whole new level. We became the first car manufacturer in the country to introduce a robotic
painting line and a full vehicle coordinate-measuring machine (CMM) for highly advanced
measuring right from the start of our operations. If these features have been implemented
elsewhere, this happened at a much later stage of the development of other manufacturers’
plants. What is more, both the paint shop and the CMM, together with our new assembly shop,
have been designed and installed by some of the premium suppliers in these areas, which once
again highlights our striving for achieving the highest quality in our work.”

No expenses were spared during the establishment of the manufacturing plant and the launch of the
first two models of vehicles as the company believed that there was prevalent hunger among the people
of Pakistan for something new that consistently maintains a high-quality standard. Over the years, the
consumers were very limited in their choice of brands, having the option of two or three at most, unless
they opted for import of vehicles which was burdened with excessive import duties. With the re-
introduction of KIA motors, Lucky Motors aimed to fulfill this desire in the market.

Lucky Motors Portfolio

Yunus Brothers Group owning a breadth of its iconic portfolio that reserves a stronghold in textiles,
construction, power generation and even commodities, set a firm foot in the automotive industry with
its division of Lucky Motor Corporation. The company engaged in assembling and distributing of Kia
vehicles, parts, and accessories.

Lucky Motor Corporation (LMC), previously known as KIA Lucky Motors, signed a partnership deal with
Stellantis Group (6th largest automobile maker in the world) in March 2021. This deal allowed LMC to
enter into a license and technical assistance agreement with the Stellantis Group to assemble and
distribute one of their European brands in Pakistan, Peugeot. This agreement essentially added another
automobile brand (besides Kia) to the LMC portfolio.

Under the brand of KIA, LMC manufactured, assembled, and marketed four models in the year 2021:

1. Kia Stonic
2. Kia Sportage
3. Kia Sorento
4. Kia Picanto

The Grand Carnival was a luxury MPV also included in the Kia portfolio but this vehicle was not locally
assembled, rather imported as Completely Built Up (CBU).

Brand Overview
Sportage History
The first-generation Sportage (JA) was a popular low budget SUV of its time in Pakistan. Introduced by
DFML, the SUV used two gasoline engines and one diesel engine. The vehicle wasn’t a powerhouse as
the most power it could pump was 130 horsepower from its 2.0L DOHC engines. However, the body-on-
frame construction and available 4-Wheel Drive functionality made it an ideal vehicle for off-roading
enthusiasts who were looking for a less-expensive alternative to SUVs like Toyota Prado and Land
Cruiser. The second-generation JE/KM models of the Sportage offered during 2006 were never able to
sell well.

In 2008, Kia motors exited Pakistan and hence the later generations were never available in the
Pakistani Automobile market. These included the 2008 facelift for the second generation which had
improved on both, the look, and the powertrain. Later, in 2010, the Sportage brand was remodeled to
become a serious contender in the compact SUV segment, and not just a cheap off-road vehicle. This
model was designed by the designer of Audi TT, Peter Schreyer. The next rendition of the Sportage
emphasized heavily on a new exterior design which made it stand out in the crowd. This model was
introduced in 2014 and was the third generation of the Kia Sportage brand. The fourth generation
Sportage made its first appearance at the 2015 Frankfurt International Motor Show, surprising the
people with its attractive design and new technological features. In 2018, this model received a facelift
and was the Sportage that was launched by Kia Lucky Motors in Pakistan in August 2019. The latest
Sportage generation, the fifth, made its global debut in the year 2021.

Product, Price, Place and Promotion – The 4Ps

Product

The Sportage had been Kia’s best-selling product in its global lineup and while the SUVs were the fastest
growing vehicle category worldwide, the Sportage happened to be the world’s fastest growing SUV.

The facelift fourth generation Kia Sportage introduced in Pakistan was the first AWD (All-Wheel Drive)
SUV that was locally assembled. The Sportage belonged to the C-Segment class of SUVs. The C-Segment
of SUVs has features taken from both adjacent segments (B and D) whereby the SUV in this segment
becomes ‘medium-sized’. In simpler words, the Sportage’s classification was that of a compact SUV.

As a start, LMC launched the fourth generation Sportage in two variants: All-Wheel Drive (AWD) and
Front-Wheel Drive (FWD). Later, in June 2020, a third variant was added to the Sportage lineup, Alpha.
The Kia brand defined the Sportage as:

“Imagine a challenging terrain, bright daylight, and yearning for adventure. In comes the
Sportage with its vibrant appeal, distinctive appearance and over the top performance, and you
have what will be the most memorable driving experience of your life.”
The CEO of LMC believed that the Sportage filled a huge gap in the market as there was no locally
assembled vehicle with 2.0-liter engine while there was no locally assembled product available between
PKR 4.0 million to PKR 7.0 million range. Therefore, he was confident that the Sportage would be
welcomed in the Pakistan automotive market.

Exterior of the car was designed to merge a Jeep and a sports car. Hence the Sportage rocked a modern
and stylish look, with a sporty front and a tiger nose grill and bi-xenon headlights, DRLs, and beautiful
LED side indicators. The car had a lot of chrome work at the front and a glassy black color material,
installed in different parts of the vehicle, including fog lamps and roof rails. The read profile was also
reminiscent of a sports car due to its LED brake lights, shark fin antenna, and roof spoiler. At launch, it
was often referred to as a miniature version of the Porsche Cayenne.

The interior of the car housed a clean and symmetrical look but felt a generation behind other modern
SUVs. The interior comprised of a digital computer that gave all the details (Speedometer, fuel average,
total drive, and drive modes), an adjustable steering wheel with cruise control, volume control, voice
command and mode buttons, and a push-to-start button. Other features of the Sportage were Driver &
Passenger Airbags, Electronic Stability Control, Downhill Brake Control, Hill-Start Assist Control, Vehicle
Stability Management, ISO Fix Child Anchorage, ABS, Panoramic Sunroof, 8-inch Infotainment with
Android Auto and Apple CarPlay with Bluetooth, Audio/Call, Voice Recognition, Cruise Control, Electric
Parking Brake, Engine Immobilizer and Rain Sensors.

The Sportage Alpha (base variant) was launched in July 2020. To achieve the entry level pricing of the
Alpha variant, Kia had to trim off available features from the other two variants. Key differences
included 7-inch infotainment instead of 8-inch, 17-inch wheels instead of 18-inch, no panoramic
sunroof, no fog lights, manual parking brake, and no parking sensors. The exhibit shows complete
specifications of all the three variants of Sportage launched in Pakistan.

The Engine of the car (same across all three variants) came with a 2.0-liter gasoline MPI that produced
154 horsepower and 196 N of torque. The Engine was mated with a 6-speed automatic transmission.
The Sportage was never meant to be a fuel-efficient car as it gave an average mileage of 10 to 12
kilometers per liter in city driving.

Price

The first two variants of the Sportage launched were the AWD and FWD, the former being the top-of-
the-line variant. Both the versions were backed by Kia’s 4 year/100,000km warranty with the FWD
priced at PKR 48.99 lac and AWD at PKR 53.99 lac. These prices were launch prices for the Sportage.
Introductory prices for a limited number of units when booking was opened in June 2019, were PKR
45.99 lac and PKR 49.99 lac for the FWD and AWD respectively. Bookings of the FWD version could be
made against PKR 15.0 lac whereas the AWD version could be booked for PKR 17.0 lac. The deliveries for
the first units were scheduled for August 2019.

The Alpha was priced significantly lower than the other two variants. This FWD system knocked off some
features to achieve this reduction in price. At launch, the ex-factory price for the Sportage Alpha was
PKR 43.99 lac.

With a tight grip on the market, Kia Sportage became the third best-selling car in Pakistan, behind only
Suzuki Alto and Toyota Yaris. Kia was not a member of the Pakistan Automotive Manufacturers
Association (PAMA) so their numbers were not officially represented in the PAMA sales charts, but many
sources suggested that Kia had achieved this feat. Thanks in part to its three variants at a variety of price
levels, with the Sportage Alpha being priced even lower than Honda Civic Turbo variants.

As the company gained advantage of the incentives of the auto policy, they had imported a significant
number of Completely Knocked Down (CKD) units for their cars. Therefore, in July 2021, they passed on
this cost saving to their customers. In that month, an announcement was made by Kia for the reduction
of prices for Picanto, Sportage and Sorento. The prices of two variants of Sportage were decreased by
PKR 129,000 and PKR 117,000, respectively. It meant the rate of Sportage AWD came down to PKR 52.7
lac million from PKR 54.0 lac. Meanwhile, the new price of Sportage FWD was  PKR 47.8 lac against its old
rate of PKR 49.0 lac. The base model, Sportage Alpha saw a decrease of PKR 100,000. The new rate of
this car was PKR 43.0 lac against its old price of PKR 44.0 lac.

The critics and skeptics raised an important question; Will Kia be able to maintain these competitive
prices once the Auto Policy expired in July 2021? Unfortunately, as the auto policy expired, and the
dollar to PKR rate crippled in November 2021, Kia officially increased prices of all three variants of the
Sportage and other vehicles in its portfolio. The updated prices for the variants were:

 Alpha: PKR 46.5 lac

 FWD: PKR 51.5 lac
 AWD: PKR 56.5 lac

The exhibit shows updated prices with respect to old prices in the year 2021.

The price hike in the automotive industry was not only limited to Kia, but across the board. Toyota,
Honda, and Suzuki soon increased their prices as well. The increase in Sportage prices was PKR 3.5, 3.7
and 3.8 lac for the Alpha, FWD and AWD respectively. Whereas the increase in Corolla prices was an
average of PKR 2.0 lac across all variants. This depicted a lower percentage increase for the Corolla
models compared to Sportage models, however, the price increase for Toyota Pickups (Revo and Hilux)
and D-Segment SUV (Fortuner) was significantly greater than the price increase of Sportage. The
Fortuner saw an increase of PKR 5.0 lac and the Revo Pickup price was increased by PKR 3.3 lac.
Consequently, it was hard to attribute the price hike to the expiration of auto policy but to the
degradation of Rupee to Dollar.

Place

The Sportage was launched in an auspicious event in Pearl Continental Hotels Karachi. This was since the
Sportage was the company’s first product which deserved a grand launch at a posh location with the
right amount of attention from media. Later models, like the Picanto and Sorento, were launched on
dealerships for Kia.

When the Sportage was launched in August of 2019, LMC had 15 dealerships for Kia cars. The CEO had
planned to expand the network of dealers across the country within the next three years of
inauguration.

By the end of 2021, Kia Motors had a vast network of 35 dealerships across the country. Company
officials and management believed that this expansion was faster than anticipated, and that Kia and its
partners grew their network and agreements faster than any other car manufacturer. Part of it was
credited to the above-expectation sales of the Sportage models.

The biggest dealerships in Karachi were Kia Lucky One (Inside Lucky One Mall: also a project of YBG
conglomerate) Kia Mecca and Kia Motors Clifton. These dealerships served the additional purpose of
visibility and recall (rather than closing sales) as brand teams at Kia believed that “considering Kia’s
history in Pakistan, it was imperative that it was let known to the market this time, Kia was here to stay.
These dealerships in prime locations of Karachi served as recognition points for consumers.” Apart from
this function, many of the large dealerships also provided the service of test-driving Kia vehicles.

Kia dealerships were also the first in the automotive industry of Pakistan to provide bookings from
home. Due to the lockdowns amidst the pandemic in 2020, coupled with Kia’s power to surprise and
Macca motor’s tradition of always going the extra mile, the book-from-home campaign became a
reality. It was a commendable idea that took the automotive industry forward by putting futuristic
global trends in place. The process was fairly simple yet gave customers the comfort of choosing their
car from the safety of their homes. The requirements were to fill an online registration form through the
Macca Motors Facebook page, and they would send you e-brochures and any other guidance needed.
The cheque/pay-order was to be emailed to the dealership, and upon confirmation, they would send
booking details to the customer. The campaign was launched in April of 2020.

In the 21st century, no organization, not matter how big or small, could lead the edge without a social
media and online presence. LMC hosted a beautifully crafted, customer-centric, purpose-driven website
for Kia Motors in Pakistan which made use of vibrant colors and the new Kia logo. The same colors were
used on billboards for the campaign “Movement That Inspires”. The website provided all details about
local lineup of Kia as well as the global offerings. It also gave key information about the dealership
network across the country. Kia Motors also had a YouTube channel, along with the staple Facebook
page and Instagram account. On these media, the company regularly updated news, promotional
campaigns, and upcoming products to keep the customers engaged.

Promoti on