Sales cannibalisation might be a trivial issue to the passing observer. You might think that producers don’t really care, because they’re making money either way if people opt for one model over the other, but still from within their portfolio. However, sales cannibalisation is actually rather embarrassing for any given carmaker, as they’d much rather have you believe that every model sits in a defined, individual space, protected and shielded from its siblings, each with their own unique selling points and positioning.
Kia Australia appears to be facing that issue now with the Optima, the mid-size saloon that was once the nameplate that drove change, innovation, and style in the range. The sharply-styled and well-appointed Optima is now facing a squeeze from both above and below: The Kia Stinger, which offers rear-wheel drive and a more involving experience at the helm, can’t be made fast enough for Australian buyers, whereas the smaller Cerato has just been renewed for a new generation, and has crept up in size and is beginning to put pressure on the Optima.
Kia Australia COO Damien Meredith knows that the Optima’s future is pretty bleak, with two newer, more advanced vehicles in the Kia portfolio effectively squeezing the Optima out of contention. However, he’s underlined his commitment to the Optima nameplate, but indicates that he’d willingly pull the plug on it if need be.
“We’re not going to get rid of the [Optima] nameplate, we’re going to keep the model. We’ve just got to work a little harder in regards to how we position it, what pricing strategy to use with it, and also more in regards to stronger financing offers, etcetera. Personally, I don’t want to cut it loose at all, but we’ve got to make sure it fits between the new Cerato saloon, which is a bigger car, and obviously the Stinger.” — Damien Meredith, COO, Kia Motors Australia
The new Cerato is indeed a bigger car, and Kia Australia has already confirmed that it’ll be arriving on our shores replete with a top-flight GT model, presumably with a more powerful turbocharged petrol motor, serving alongside the same naturally-aspirated lump we already have. The Cerato GT would certainly make the larger Optima a little nervous, with the prices of the former likely to sit very close to the Optima’s entry point (if not higher still).
Then there’s the matter of the Stinger, positioned as a more premium offering. More importantly than that, it comes as standard with a turbocharged petrol mill and rear wheel drive, and is far more engaging to drive and is arguably better looking than the Optima. In its base 4-cylinder form, the Stinger also puts pressure on the Optima, which demands only a small step up to be rewarded with all the wonderousness that rear-wheel drive affords.
The mid-size saloon segment, in general, has also faced shrinkage year-on-year as more and more buyers opt for SUVs to ferry themselves and their brood around. Further, at this end of the market, it’s possible to secure a comparably-sized SUV replete with all-wheel drive which, while likely to never be fully utilised, offers the illusion and/or promise of a more active lifestyle, which is remarkably important to buyers.
To keep the Optima alive, Meredith has promised that there’s work being done behind the scenes to reposition the car, as well as secure more competitive financing deals to keep the Optima ticking. The COO has said to CarAdvice that Kia “won’t be scared” to make important pricing decisions for the Optima if need be, perhaps even dropping the Optima GT and focusing on the S and Si models, which contribute some way to fleet sales (and critically, give the 2.0-litre Stinger room to breathe too, as they share the same engine).
What is clear is that an analysis of where the Optima ought to be on the market, in tandem with where newer models like the Stinger and Cerato sit in relation to it, will be critical should Kia Australia want to hit its sales target of some 60,000 cars this year. The Stinger, while hotly-anticipated and critically-acclaimed, will only contribute a small percentage to that figure, with greater growth expected from the Cerato and even the micro Picanto.