EXECUTIVE SUMMARY

BACKGROUND

Korea's oldest automaker is called KIA Motors. Kia has become the fifth-largest automaker in the
world. Its automobiles are distributed in 172 countries via a network of 3000 distributors and
dealers. Performance sedans, minivans, SUVs, and tiny hatchbacks are among its product
offerings. The firm also uses fuel cell and hybrid electric technologies to manufacture tools and car
components (ERGO HDFC, n.d.; Bloomberg, n.d.).

In reality, the name Kia is derived from two Sino-Korean letters. The first letter "ki" indicates "to
arise," while the second character "A" stands for Asia. It therefore means "to rise from Asia" in direct
translation (Kia, 2023). The company commits to "building a new future and realising humanity's
dreams by thinking creatively and tackling challenges head-on." Today, Kia employs more than
40,000 people, manufactures more than 1.4 million cars annually at 14 production and assembly
facilities across eight countries, and generates more than US$17 billion in sales annually (Kia, n.d.).

The key competitors of KIA Motors include Toyota, Hyundai, Nissan, Honda, and Ford. Below is an
overview of the strengths, weaknesses, and international issues of the major competitors of KIA
Motors in the Nigerian automobile space. This exploration of the indices is essential to providing
insights into where these competitors have maximised opportunities and uncovering their
vulnerabilities. This will offer KIA the ability to optimise market gaps and adapt to the evolving
automobile industry.

KEY STRENGTHS WEAKNESSES INTERNATIONAL

COMPETITORS ISSUES

Toyota Toyota's strong brand The company faces The global market is
awareness and challenges in prone to fluctuations due
recognition boost its advertising and to various economic,
value and sales, market share for political, and social
benefiting the bottom eco-friendly factors, impacting
line through its automobiles due to Toyota's earnings due to
extensive global excessive reliance trade restrictions, political
supply chain (Parker, on suppliers, which unrest, and currency
2022). could lead to exchange rate changes
production (Pereira, 2023).
shutdowns.

Hyundai Hyundai's global reach Hyundai's improved US auto safety officials

and cost-effective performance may are investigating 16
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 production methods attract some who Hyundai and Kia recalls
enable competitive perceive it as more for brake fluid leaks,
pricing, expanding its affordable or low-end affecting 6.4 million cars,
market share and than luxury brands, following a $210 million
increasing accessibility and its lower resale civil penalty in November
to a wider consumer values may deter 2020 (Reuter, 2023;
base (Shastri, 2023). buyers (Shastri, Rana, 2023)
2023).

Nissan Nissan offers diverse Customer feedback The global sales of

products to meet and management electric motors have
diverse customer issues reveal an surged despite a decline
demands and organization's in total automotive
lifestyles, weaknesses, often income, reflecting a shift
demonstrating its due to a lack of in consumer expectations
astuteness in catering resources compared and styles.
to various clientele to rivals, resulting in
groups' lives (Momin, poor performance.
2021).

Honda Honda has established Honda's high Several nations have

production centers in production costs in halted business in Russia
industrialized nations the US, Mexico, and due to the conflict
and exports premium Japan contribute to between Russia and
motorcycles to boost its high prices Ukraine, impacting
sales. The company compared to Honda's market size and
showcases exceptional competitors. potentially causing
problem-solving skills significant financial
through manufacturing losses.
and innovative brand
narratives.

Ford Ford enhances Ford faces Ford faces significant

efficiency and cost challenges in risks from government
reduction through attracting younger regulations due to strict
optimized production tech-savvy pollution standards and
processes, utilizing customers, losing fuel economy criteria,
advanced materials, international market potentially impacting
engineering, and share in Europe and profitability due to large
technology to improve Asia, and insufficient R&D investments.
car reliability and electric vehicle range
lifespan. to meet increasing
demand.

PROPOSED PRODUCT

The South Korean automaker's incredible synthesis of the lessons it has learned from both its gas-
powered and electric cars over the last several years is evident in the crossover, which is more of a
wagon. It's a smart, exciting, and all-around fantastic entry into an increasingly crowded EV market
(Baldwin, 2022).

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The EV6 by Kia is a unique vehicle with a combination of SUV and station wagon design features.
Its long, low roof resembles a station wagon, and short overhangs indicate that an engine was not
included. The EV6 can be styled with a body kit, slammed suspension, or large tyres and a roof
rack, making it a versatile vehicle (Edelstein, 2023). Even though the 2024 Kia EV6 is three years
old, it remains one of the most sophisticated and technologically complex electric cars available.
That is evidence of how excellent the design and everything behind its ostentatious exterior were
when it was brand new for the 2022 model year. From the middling rear-drive Wind to the neck-
snapping GT, there hasn't been an EV6 variant that has not been enjoyed. Every kind of potential
EV owner can find something to suit them (Palmer, 2023). The launch of the KIA EV6 in Nigeria,
with recent developments such as the removal of fuel subsidies, which brought about an increase in
pump prices, and the ongoing overhauling of emission policies, can provide advantages for the
product and contribute significantly to sustainability trends in a changing automobile market space
in Nigeria.

The product, being an electric car, is described below based on its relative strengths and
weaknesses, opportunities, and threats (SWOT) within the Nigerian automobile market.

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 S.W.O.T
ANALYSIS

STRENGTH WEAKNESSES

Advanced cutting-edge electric Limited charging infrastructural

vehicle techonological innovation facilities
Reliable and well-established Affordability concern
international brand Poor awareness among targeted
Zero-emission and promoting population
environmental sustainability

OPPORTUNITIES THREATS

Leveraging government incentive Economic imbalances affecting

initiatives purchasing power
Tapping into growing interest in Changes in automobile regulatory
sustainable and eco-friendly policies
transportation scheme Competition with other EV
Strategic partnerships with automakers
stakeholders in proving EV Alternatives to sustainable
infrastructures and market transportation.
awareness.

Theoretical Concept

E.M. Rogers created the Diffusion of Innovation (DOI) Theory in 1962. It started out in the field of
communication and explains how a technology that is perceived as new by its audience gradually
develops acceptance and diffuses—or spreads—through a particular population or social system

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(LaMorte, 2022; Robinson, 2009). The model has been used as a framework for a great deal of
research from many different fields of discipline. Dooley (1999) and Stuart (2000) identified political
science, public health, communications, history, economics, technology, and education as a few of
these fields, and they described Rogers' theory as a commonly applied theoretical framework in the
field of technology adoption and diffusion (Sahin, 2006). Thus, it is useful in explaining the
introduction of the KIA EV6 electric car to Nigeria's market and serves as a guide in strategic
planning and execution.

According to the theory, innovations, new technological advancements, and ideas spread because
of four main factors: the invention itself (its kind or character), the communication channels available
to distribute the innovation, the time, and the available social structure (Gordon, 2023). According to
Robinson (2009), it is not people who change in the diffusion of innovations, but the innovations
themselves. Rather than stressing individual characteristics or behaviours that define individuals as
a whole, Robinson's assertion emphasises the transformative power of innovations, and for
development and sustainability to be achieved, innovations must be widely embraced.

Thus, it has been observed that the success of an innovation is determined by five qualities that are
recognised by diffusion scholars. According to them, the relative advantage and benefit of a specific
innovation can be measured in terms of economic advantages, social prestige, convenience, or
satisfaction, to name a few. It is crucial for an innovation to be compatible with existing values and
practises; a third factor is its ease of use and simplicity; and a fourth factor is the possibility of
experimenting with it on a smaller scale. Finally, there is the observable result of the innovation,
which is what matters most (Robinson, 2009).

Da Silva (2017) observes that within a social system, innovations are not always adopted
simultaneously by all members of the population. Rogers uses a measure of "innovativeness" to
identify distinct adopter types based on the results of many investigations. An individual can be
classified into one of the following five adopter groups using the population's average adoption time
and their own adoption time: innovators, early adopters, early majority, late majority, and laggards
(Singer, 2016). The theory proposes, therefore, that marketing efforts are best directed towards
early adopters and the early majority, as they have high disposable income, sociability, and
influence. These segments can create momentum, leading to a product's widespread adoption.

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Fig. 1: Classification of adopters based on innovativeness

Source:

Analysis of the host country and industry characteristics

Economic Factors:

The Nigerian economy is structured in a way that is characteristic of a developing nation (Chete et
al., 2012). Nigeria is among the lower-middle-income countries of Africa, despite having the largest
economy and market on the continent with a population of over 200 million (Sasu, 2023; ITA, 2023).

Since Nigeria gained independence in 1960, successive governments have strived to achieve
structural changes but have not been able to do so with much success. Natural resources and
primary products have been the driving forces behind the growth dynamics, and they have been
exploited to the maximum extent possible, rendering the economy feeble, narrow, and externally
driven (Sanusi, 2010; NBS, 2010). Metu et al. (2019) stressed that the demand for growth caused
public spending to skyrocket, opening the door for small groups of businessmen and politicians to
enrich themselves.

Though the Nigerian economy grew by an average of over 7% per year between 2000 and 2014,
this development was made possible by macroeconomic reforms, first-stage structural changes,
and favourable international conditions. However, between 2015 and 2022, growth rates declined
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and GDP per capita flattened due to distortions in monetary and exchange rate policies, a rise in
trade protectionism, and external shocks such as the COVID-19 pandemic, all of which caused
higher fiscal deficits as a result of falling oil prices and an expensive fuel subsidy regime (World
Bank, 2023).

The recent Nigerian macroeconomic and financial development outlook indicates that real GDP
growth fell to 3.3% in 2022 from 3.6% in 2021, precipitated mainly by a decline in oil production
(AFDB, 2023). Nigeria recorded one of the highest inflation rates worldwide. In 2021, this figure
peaked at over 17% in urban areas, whereas in rural areas, the inflation rate was slightly lower
(Sasu, 2023). Nigeria's annual inflation rate (indicated in Fig. 2) increased from 26.7% in the
previous month to 27.3% in October 2023—the highest level since August 2005. The Central Bank's
decision to scale down its operations in the foreign exchange markets in June, along with the
government's removal of fuel subsidies in May and the weakening of the naira, has contributed to
increased inflationary pressures in recent months.

Fig. 2: Inflation rate in Nigeria (January-October 2023)

Source: Nigeria Bureau of Statistics

According to data on the consumer price index (CPI), as shown in the figure below (Fig. 3), the
Consumer Price Index in Nigeria was 471.8 points in August 2022; in August 2023, it was
significantly higher at 593.6 points. In general, throughout the past few months, the nation's inflation
rate has been steadily rising (Sasu, 2023).

Fig. 3: Nigeria's monthly consumer price index (CPI) for the period of January 2019 to August 2023.

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Source: Stastica.com

Given the ongoing increase in spatial inequality, it is predicted that in 2023, 84 million Nigerians—
the second-largest impoverished population globally after India—will live below the poverty line,
accounting for 37% of the country's total population (World Bank, 2023). Therefore, one might say
that Nigeria's vehicle sector is likely to be greatly impacted by the country's present economic
reality. Consumer purchasing power is directly impacted by ongoing exchange rate changes, rising
inflation, and the general state of the economy. In this case, KIA's marketing performance will solely
depend on its capacity to adjust to changes in the economy and preserve affordability within the
current competitive market environment.

Political and Legal Factors:

The claim that Nigeria's state, like those in Africa and other developing nations, underperforms
because it cannot handle the complexity of modern governance has been made repeatedly and
persistently over the years (Yagboyaju & Akinola 2019). Ajayi and Ojo (2014) believe that the
majority of Nigerians may not find democracy strange, but they may find it strange when it comes to
the kind of democracy that prioritises financial and human resources for social services that improve
people's lives, economic viability, political stability, and scientific and technological advancement.
Considering the widespread belief that Nigeria, having gained independence from Britain in 1960,
would be the bulwark of democracy in Africa, one would ordinarily assume that democracy has by
now been thoroughly ingrained and institutionalised in the nation. Yet, liberal democracy is a cripple
that can hardly walk or run when it comes to actual practice and the distribution of the dividend of
democracy.

The political landscape in Nigeria is characterized by government instability, which is now

exacerbated by the ongoing election crisis (Fadakinte, 2013). Ighodalo (2011) emphasised that the
general election experience in Nigeria has demonstrated that the political elite still does not
completely understand the significance of elections for maintaining national security and
democracy. The laws of competitive electoral politics, which give precedence to the politics of
tolerance, dispute and consensus, negotiation, and compromise, have, for the most part, been
ignored by the political elites.

Nigeria has used a variety of normative systems, including positive law, throughout its history. The
Nigerian constitution has been utilised, fundamentally, to institutionalise the state's developmental
responsibilities. Ordinarily, the law should be used in development policies as a tool for assistance
(Lawan, 2011). However, in practice, Nigeria has seen the opposite, with successive administrations

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frequently acting carelessly and heedlessly in their violations of the rule of law (Akanbi & Shehu,
2012).

The political and legal milieu, as described above, holds some significant implications for the launch
of the KIA EV6 in the country. For example, the policy uncertainty brought about by the advent of
ongoing election crises could pose potential risks for electric vehicle investors as policies may
drastically be altered, especially in the event of a change in government. Also, challenges in policy
implementation could be hampered by corruption. Given these, vehicle stakeholder synergy
between the government, industry stakeholders, and advocacy organisations could go a long way in
addressing some of these concerns and therefore creating, in the long run, an environment
necessary for the sustainable growth of electronic vehicles in the Nigerian automobile market.

Environmental Factors:

While industrial pollution and pollution in the oil industry receive a lot of attention in Nigeria, mobile
transportation-related air pollution is rarely discussed. As a result of the increase in cars owned per
capita, the amount of pollution produced by mobile transportation sources is on the rise. As a result,
Nigerian cities experience high levels of traffic, and air pollution rises, putting the public at risk of
health problems (Abam, 2009). However, in 2011, government attention began to shift to regulating
vehicular emissions from petrol and diesel engines to restore, preserve, and improve the quality of
the air through the National Environmental Regulations of 2011 (Official Gazettes, 2011).

Nigeria is a member of the West African Community, which has established a strategy to increase
the fuel efficiency of imported cars. The goal is to double the fleet's efficiency from an average of 8
litres per 100 kilometres now to 4.2 litres per 100 kilometres by 2030. To encourage the use of
electric vehicles, the vehicle fuel efficiency plan proposes to implement fiscal incentives.
Additionally, it calls for the creation of a new, uniform label for newly imported vehicles that will
display the vehicle's fuel efficiency and CO2 emissions to raise consumer awareness (UNEP, 2020).

Therefore, it is clear that Nigeria's present environmental regulatory framework offers a strong basis
for the adoption of electric cars. Similarly, KIA may use this framework to establish EV6-friendly
regulations, such as EV-specific emission guidelines and financial incentives for EV adoption.

Social and Cultural Factors:

Nigeria is the sixth-most populated nation in the world and the most populous in Africa. In addition, it
has one of the densest populations in Africa, home to some 218.5 million people over a 923,768
km2 territory. (Akinyemi and Isiugo-Abanihe, 2014; World FactBook, 2023).

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Nigeria exhibits cultural variety with its diversified population of over 250 ethnic groups and 500
languages and its 54.3% urban population. The World Population Prospect projects that Nigeria will
rank third in the world's population by 2050 due to its youthful population (42.54% of those aged 0–
14) and high dependence ratio (Findlay, 2016). Without appreciable advancements in infrastructure
and social amenities, Nigeria's urban population has expanded at an average yearly pace of more
than 6.5% during the previous 50 years (UNSD, 2020).

Comprehending the socio-cultural milieu necessitates that the businesses function under the
directives and oversight of the community within which they are managing their operations.
According to Zwingina et al. (2017), business development provides a secure environment for the
creation and innovation of distinctive goods, ideas, and services that align with people's values,
culture, conventions, beliefs, and lifestyles. Nigeria, the most populated nation in Africa, offers EV6
a large market opportunity. This is particularly crucial in cities where interest in sustainable travel
may be driven by environmental concerns. However, the company's awareness of the many cultural
values, beliefs, and lifestyle choices in the nation would be crucial to the success of the EV6 launch.

Marketing Mix of the KIA EV6

As the conduit between a firm and the market, the marketing mix is a crucial part of a business's
marketing strategy (Wichman et al., 2022). According to Thabit and Rawef (2018), it is a collection
of factors that a business can use to influence how a customer reacts to a good or service. The 4 Ps
of marketing (product, price, place, and promotion) are closely related to the marketing mix.

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At this juncture, the 4 Ps of the marketing mix will be used to analyse how the product can be
marketed among the target population in Nigeria.

Product:

The first element of KIA's four Ps of marketing is the product. The automaker has over 30 brands of
sedans, station wagons, crossovers, and MPVs in its vast product lineup. KIA has established
brands that are well-known around the world over time. From the corporate profile, some of the
most well-known brands include, to name a few, Ceed, Ceed SW, K3/K5/K8, Picaanto, Rio, Soul,
EV series, and Sportage (CCV, 2023).

The firm offers an electric engine that may be equipped with an automated gearbox, called the EV6.
The EV6 is a five-seater with a range of 708 kilometres and a battery capacity of 77.4 KWh (with an
8-year guarantee). The purpose of this specific model is to cater to the evolving demands and
inclinations of customers who are growing more apprehensive about the environmental
consequences, durability, and enduring appeal of conventional transit systems (KIA, 2023).

However, given the country's present infrastructure and the intrinsic characteristics of the vehicle,
this model and design are sure to encounter a number of difficulties. A few of these difficulties could
be seen in the inadequate infrastructure for charging, the worry caused by the product range when
travelling for extended periods, and the difficulties in finding charging stations. Lastly, the initial
expense of obtaining this electric car may also cause frustration. However, rivals may encounter
comparable challenges; notwithstanding, they may devise approaches to adjust, evolve, and adapt
to the needs and concerns of customers.

Price:

In order to make EVs more appealing and accessible to a wider range of consumers, KIA eventually
hopes to offer an EV lineup at various price points. However, by offering a range of prices, KIA can
accommodate a variety of budgetary constraints and guarantee that more people have the chance
to switch to sustainable and environmentally friendly transportation options. This product is available
from the carmaker for a little over $52, 000 (N42,954,800). Even though most automakers provide a
tiny, inexpensive entry-level automobile, people with an extra $50,000–80,000 to spend on a car
can choose from a somewhat larger, more costly model (Arawheels, 2023). However, KIA wants to
dominate the electronic car industry and have a big impact on more environmentally friendly
features in the long run.

Promotion:

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The target market is mostly upper-class individuals and cooperatives who live in metropolitan
regions and big cities like Abuja, Lagos, and Port Harcourt, based on the product characteristics
and pricing. As early adopters, they would benefit from this EV model in encouraging and driving the
need for a more sustainable environment and in progressively moving away from the traditional
model car with all of its associated difficulties. Though this model vehicle may be misconstrued as
prestigious, it is a step into the future automobile space.

Place:

For this particular sort of car, an accessible location with somewhat strong infrastructure support
would be necessary to reduce the possibility of user dissatisfaction. Therefore, EV6s are to be
dispersed throughout Nigeria's major towns and urban centres.

To enable the product's delivery to these areas and the construction of the necessary infrastructure,
KIA would also need to work with partners in the automotive sector.

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