TBY talks to Faig Safarov, President of KIA Motors Azerbaijan, on its activities in the country, successful models, and the importance of after-sales services.
TBY When did KIA come to Azerbaijan and what were the strategic goals of the company in coming here?
FAIG SAFAROV Despite the fact that the sale of KIA automobiles in Azerbaijan was organized through a Turkish distributor for some period, the project was not sustainable. Only in 2005 did KIA Motors start to look for a distributor directly in Azerbaijan. The Azerbaijani economy had already proven its potential, and it was a natural choice for an automobile manufacturer like KIA Motors to take its share of the local market. Sales started in 2006 and we proved to our Korean partners that they had made the right choice; we achieved 168% and 318% growth during the second and third years of our operations. For that reason, we were elected a member of the Zenith Club, comprised of the best KIA distributors worldwide.
What are the strengths of KIA in Azerbaijan?
Over the years, KIA has earned the respect of customers with its unique designs, high quality, and affordable prices. In addition, we have brought innovation and new approaches to the sector. For example, we were the first in the market to give a five-year or 150,000-kilometer guarantee for automobiles. Also, the introduction of the KIA Soul model led other brands to offer models belonging to the same segment. As a result, KIA is known as both a pioneer and an innovator in the local market.
How has the services side of the business developed?
We usually say that only the first automobile is sold by the sales department, the rest are sold by after-sales service. Hence, it is the services side that establishes the image of a brand in the market. Taking this into account, one of our aims since the first day of our activities has been to provide a high-level service to KIA owners, and we are giving priority to quality rather than quantity. We currently have six authorized service centers operating, and each of them is provided with the most modern equipment and tools. Staff members are taking training courses both within the company and abroad. The major aim of the service is to achieve the highest level of customer satisfaction, and at KIA we are all working in this direction.
How was 2011 for KIA in terms of sales? What are your future targets?
The results for 2011 were better than we planned, and we achieved 58% annual growth—the highest rate within the local automobile sector. Our main goal for 2012 is to expand KIA’s representation in the regions of Azerbaijan, because it is there where we will see high growth rates in the future, thanks in part to the development of the right economic policies by the government.
Which models are considered more successful in the Azerbaijani marketplace?
As in many places, the Azerbaijani market has its own specific sophistications. For instance, according to the results of 2011, our best-selling model was the Sportage, which belongs to the SUV class, and the Rio and Cerato models followed it. We have also seen 190% growth in the sale of the new Picanto model, and we expect to consolidate the presence of that model within the market. As for consumer trends, the Azerbaijani population tends to look at Europe rather than Asia when it comes to car models. In addition, we have seen an important increase in the number of women drivers in the country.
How would you assess the sector’s human capital in Azerbaijan?
As a fast developing country and economy, I would say that there is an important need for qualified professionals in fields such as the automobile sector. The country needed a certain period of time to establish the right labor market. The positive aspect in all this is that the government was and is working in the right direction to address the situation. The government has been stimulating the establishment of new specialties in higher education, and it encourages young people to study abroad through various programs. The result is already being seen; the supply of a young labor force with modern knowledge is increasing day by day.
How significant are KIA’s activities in Azerbaijan for its global strategy?
Big buildings consist of many small bricks, and KIA Motors operates in more than 170 countries. Although Azerbaijan is not so big in terms of territory and population, it is among the leading countries in terms of sales indicators, development dynamics, and particularly for future potential. For example, in 2011 KIA Motors Azerbaijan was the regional leader in terms of sales and we were awarded for that. According to sale indicators, Azerbaijan is the fourth country in the region after Russia, Turkey, and Ukraine.
What’s your general outlook for the automobile sector over the medium term?
We forecast continued growth in the sector for 2012, and we expect a rate of around 8%-9%. I think the market will give more preference to automobiles produced both in Russia and South Korea, and the share of the latter will increase significantly. The market share for more compact and economic automobiles will gradually increase, for we believe that the acquisition of second automobiles by Azerbaijani families will grow strongly in the near future.
© The Business Year