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Is Kia going the way of Daewoo Motors?

By DELE SOBOWALE

“DANA GROUP OF COMPANIES PLC…IN RECEIVERSHIP…” Kunle Ogunba, Esq, SAN. PUNCH, June 27, 2014, p 40.

Most Nigerians reading newspapers might have missed the publication. Even owners of KIA vehicles, like me, might have failed to understand the full implications of that announcement which include the possibility that the KIA brand of vehicles might be following DAEWOO out of the Nigerian market with the developments at DANA GROUP OF COMPANIES PLC.

*Kia  Rio
*Kia Rio

Incidentally, the group of companies, under receivership, includes all the companies, especially the DANA MOTORS whose workshop would probably have been locked up by now – leaving all those whose vehicles were inside in various degrees of difficulties.

My car was almost one of them until my lawyer advised me to claim my car before filing a suit against DANA MOTORS – which had become a disgrace to its owners. In fact, by March of this year, it was clear to me that no company can continue to treat its customers the way that workshop did without going under.

DAEWOO AS FRONT RUNNER FOR SOUTH KOREAN VEHICLES

Those old enough to remember would recollect how in the late 1980s and 1990s DAEWOO Racers came to the rescue of Nigerians by providing affordable new cars after the Structural Adjustment Programme, SAP, made owning a new car impossible for all but the wealthy. Hitherto, the Nigerian car market had been carved up between Peugeot, Volkswagen, Datsun, Toyota, and Mercedes Benz. All of which were then out of reach for middle class income earners.

DAEWOO RACERS arrived just in the nick of time – offering vehicles which had ninety per cent the car value of Toyotas at sixty-five to 70 per cent the price. Nigerians jumped at them; while forgetting that cars represented a long term investment and that after sales service were the paramount considerations for such investments.

It didn’t take long for the poor after sales service provision of the marketers of DAEWOO to reveal itself. One DAEWOO RACER after another eventually crawled to a stop.

And, with each one DAEWOO moved closer into the graveyard of car brands which had once plied Nigerian roads – DATSUN, LANCIA BETA, SANTANA, VOLKSWAGEN BEETLE, PEUGEOT 504, 505, 607; just to name a few.

As Nigeria came out of the long recession brought about by the drop in the price of crude oil from $28 per barrel to $9.95, under Babangida, and crude oil prices climbed on an escalator, which has brought it to over $112 per barrel today, the South Korean car makers, KIA and HYUNDAI, were among the first beneficiaries of the economic expansion which started in 1998 and remains till today.

Borrowing partly from the business model of DAEWOO, they offered vehicles which had 90 per cent the value, at 70 per cent the price of TOYOTA. They also learnt from DAEWOO experience, or so we thought, they established workshops with their major distributors, Indian-owned DANA GROUP OF COMPANIES.

Nigerians, who have had several decades of experience with Indian business men were worried that the South Korean car makers might have committed a strategic blunder by teaming up with DANA.

Admittedly, DANA made an initial success out of KIA. In fact, the brand succeeded far better than anyone could have imagined. KIA’s unexpected success, or, the typical Indian company’s penchant for short-term might have undermined the venture. It is obvious that more cars have been sold to the Nigerian market than the workshops can reasonably handle.

DANA MOTORS started well. Three sales offices and workshops were opened in Lagos – Victoria Island, Oshodi and Amuwo-Odofin. A vehicle sent in, on appointment, for minor repairs, would generally be returned to its owner on the same day and the charges were surprisingly reasonable.

My own personal experience, covering more than ten trips to the Oshodi workshop, was invariably pleasant. It was this pleasant reception which prompted me to buy a KIA OPTIMA for myself and to contribute towards purchasing CERATO for one of my daughters. Today, it all appears like a foolish mistake.

WAS BUYING KIA A MISTAKE?

My initial instinct was to buy another car — particularly with the bad reputation Indian businessmen had acquired in Nigeria. But, while still grappling with the decision regarding the brand to buy, I traveled to Ghana to train the sales staff of one of my clients. The company’s National Sales Manager was driving a one year old KIA OPTIMA; he had previously driven a Peugeot. His unalloyed praise for the KIA car overcame my fear of dealing with an Indian company. As my Ghanaian friend said: “This car will give so little trouble; it won’t matter who the marketers are.” He was mostly right. The three KIA OPTIMAs I have owned have given me very little trouble and all was well until recently.

First, I discovered that the Oshodi workshop was closed. Then, the Victoria Island workshop was also closed. Even when the three workshops were opened, it was becoming increasingly clear that same day repair of vehicles was no longer achievable. There were just too many KIA vehicles and not enough facilities for repairs.

AMUWO-ODOFIN WORKSHOP: THE CUSTOMER BE DAMNED

The closure of the two workshops, which resulted in sending every customer to Amuwo-Odofin, gradually, began to take its toll on the quality of the service delivery and customer relations. Cars were not only held for weeks; the repair work was often badly done. That was bad enough.

Rightly, or wrongly, some of the customers came away with the impression that they were charged for services not rendered or that their vehicles were deliberately damaged to create more work for the workshop.

One vehicle went in with one complaint and was returned with another problem – even when the original problem had not been solved. The vehicle went in the second time for the “new” problem and the workshop again discovered a problem which did not exist before the vehicle went in.

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