16 January 2012

Almost exactly two years ago I had a long discussion with a senior director from a European automaker about whether the government’s scrappage scheme would have any lasting effect on the UK car market.

It would be unfair to name him here but, while I argued the scheme was a ‘game changer’, he felt it was just a temporary boost for some minor brands. History may prove him right of course but I suspect that, were we to have the same discussion today, he might take a different view.

With that conversation in mind, it was interesting this week to drive the new Kia Optima and consider how far Korean brands have come in three years – and at whose expense.

I’m not going to pretend that the Optima (competent car, great value for money but lagging on CO2 for a D-sector contender) is another game changer. But it’s a measure of the brand’s confidence that managing director, Michael Cole, is talking seriously about picking up some ex-Saab buyers – not to mention lonely Laguna customers.

The figures are plain to see. In 2008, Kia sold 31,324 cars and took 1.47% market share; in 2011 (without the benefit of scrappage) Kia sold 53,615 cars and took 2.76% market share. In the same period, Hyundai has more than doubled both sales and market share.

In contrast, Renault has lost 0.67% share, Peugeot has lost 0.68%, Fiat has lost 0.46% and Citroen has lost 0.28%. These ‘old guards’ of volume European carmaking are struggling – and, of course, Saab has gone bust.

Just before Christmas we learned that Renault’s local strategy is to accept the inevitable and cut fixed costs. Off the record, many industry leaders feel Renault’s decision is both brave and, in the circumstances, correct.

Next week I’m having lunch with Tim Zimmerman, the new boss of Peugeot UK. Although he has barely got his feet under the table, it will be interesting to hear if he has a plan. But, it seems unlikely PSA Peugeot-Citroen is going to go the Renault route.

As our lead news story makes clear, the group has just appointed regional directors with the specific aim of building sales outside the native French market. Those are not the actions of a company about to beat a retreat.

Rupert Saunders

Got a view to share on what I’ve said? Drop me a line at

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