Kia has opened the doors to its certified pre-owned vehicle program that spans not only conventional internal combustion engine vehicles but also electric cars.
On the 25th of the month, Kia held a media day for its certified pre-owned vehicles at the Floating Island Convention Center in Seocho-gu, Seoul, under the theme ‘Movement to Trust’. The company announced that it will begin purchasing and selling pre-owned vehicles from its brand starting on the 1st of next month.
The head of Kia’s domestic business division, Vice President Kwon Hyuk-ho, stated in his welcoming speech, “Today, we want to be a brand that takes responsibility for the mobility life cycle of customers purchasing not only new cars but also used cars. By offering stable pre-owned vehicle purchase services to new car buyers, we aim to establish a virtuous cycle that connects new and used car customers, enhancing brand trust and loyalty by providing all mobility services that customers desire from new to used vehicles.”
Kia introduced three key differentiation strategies for its certified pre-owned vehicles: ▲ Providing a new customer experience unique to a complete vehicle manufacturer ▲ Supply of the highest quality used vehicles ▲ Introduction of South Korea’s first quality grading system for used EVs.
As a ‘Sustainable Mobility Solution Provider’, the certified pre-owned vehicle business aims to enhance mobility experiences from the perspective of customer life cycles, providing products and services with the highest level of reliability.
The annual transaction volume in the domestic used car market is approximately 30 trillion KRW, with a total of 2.38 million vehicles traded last year, which is about 1.4 times more than the number of new car registrations.
Kia will supply high-quality ‘manufacturers certified used cars’, including not only conventional vehicles but also electric cars, being the first among domestic automakers to do so.
To ensure the highest grade of safe Kia used cars, the selection criteria limit sales to vehicles that are accident-free and within 5 years or 100,000 km from their new release.
In light of a survey indicating that consumers consider ‘trustworthy quality’ as the most crucial factor when purchasing used cars, Kia has integrated its complete vehicle quality management system into its pre-owned vehicle business.
Kia has developed a precise merchandising process exclusive to its certified pre-owned vehicles, based on a ‘complete vehicle quality management system’ covering six major categories: body/moving/interior & exterior/chassis/electrical/powertrain, ensuring both functional and emotional quality are considered.
Additionally, as a leading electrification brand, Kia is supplying EV (Electric Vehicle) certified used cars to the market for the first time among domestic brands and transparently disclosing the performance and condition information of used EV batteries.
This initiative is planned to lower the barriers to access used electric vehicles, contributing to accelerating the electrified mobility era.
The new electric vehicle market has steadily grown in the past few years, now accounting for 10% of the domestic automotive market as of last year, but the used electric vehicle market still accounts for only 0.7% of total used car transactions.
There is a lack of objective performance evaluations and pricing standards for used electric vehicles, leading to a staggering 64% of transactions occurring between individuals without going through sales companies (as per 2021 statistics from the Ministry of Land, Infrastructure, and Transport).
Kia plans to leverage its expertise as an electric vehicle manufacturer, utilizing its technology and know-how to establish a ‘quality inspection and certification system’ specifically for electric vehicles, which have structures different from internal combustion engine vehicles, and introduce the first ‘used EV quality grading system’ composed of a total of five grades.
For electric vehicles, the remaining life and stability evaluation of the battery, which represents about half of the vehicle price, are critical for determining residual value.
Using the ‘Smart EV Solution’ (dedicated diagnostic tool), Kia will precisely diagnose the four key systems of electric vehicles: ▲ High-voltage battery control system ▲ High-voltage charging system ▲ High-voltage distribution system ▲ Power conversion system to assess the current performance and status of the battery.
Furthermore, Kia will measure the driving distance per full charge to grade the relative actual performance compared to the manufacturer’s claimed driving range, and assign a final EV quality rating that combines ‘battery grade’ and ‘driving range grade’.
Kia will only sell vehicles that have received a rating of grade 3 or higher after this meticulous performance assessment.
A company representative stated, “Consumers consider the resale price they can receive when selling their used cars in deciding to buy new cars. For the electrified mobility era to accelerate, establishing an objective residual value for used EVs and activating transactions is essential.”
Kia has also introduced an online direct transaction channel for its certified pre-owned vehicle sector. By building a sales and purchase channel centered around e-commerce, the company aims to communicate more directly and rapidly with customers, allowing them to carry out the entire process of shopping for and selling used cars seamlessly.
Customers can search and compare products on the ‘Kia Certified Pre-Owned Mobile/Web Site’, and can manage the entire process of purchasing and selling their vehicles, including estimates, contracts, payments, and deliveries, as well as checking the value of their vehicles and requesting detailed estimates.
As for the ‘Sell My Car’ service, it was initially offered only to new car buyers as per the recommendation from the Small and Medium Business Administration last April.
The target vehicles for purchase are limited to Kia brand vehicles that are less than 5 years old and have less than 100,000 km with no accidents.
By limiting purchases to Kia brand vehicles, Kia focuses on taking care of its existing customers and increasing brand loyalty.
Most companies conduct evaluations with professional assessors for vehicle sales, but Kia, for customer convenience, assesses vehicles for purchase using a fully non-face-to-face process based solely on data.
The purchase price is determined from the ‘expected purchase price range’ derived from a big data-based pricing engine, supplemented by vehicle photos taken by customers and vehicle information that Kia possesses.
Thus, customers need only upload photos of the vehicles they wish to sell.
This process allows customers to quickly finalize vehicle sales without the hassle of negotiations or on-site depreciation that often accompany face-to-face evaluations.
If a customer has requested a visit from a professional, the professional will only check the vehicle’s accident status and condition but will not conduct any price negotiations or valuation evaluations.
The Kia Certified Pre-Owned Vehicle Program has adopted comprehensive quality management practices from its complete vehicle quality, production, research & development, and service sectors to establish the core aspect of its pre-owned vehicle business: the ‘merchandising process’.
Kia has applied its ‘Complete Vehicle Quality Management System’ directly to the used car merchandising process, conducting quality inspections at every major stage and standardizing the merchandising process to ensure thorough quality assurance measures. Thus, significant differences from non-manufacturer certified pre-owned vehicles are established.
Kia’s certified pre-owned vehicles undergo a systematic quality management process through a total of nine stages of improvement, inspection, and certification, including ‘Inspection upon Entry to the Merchandising Center – Exchange, Bodywork, Painting, Restoration – Functional Repairs – Replacement of Consumables – Merchandising Inspection – Certification Inspection – Protection Package Application – Glass Coating – Exit Inspection’.
Kia has designed its merchandising process to include an additional four inspection processes to ensure a higher quality vehicle is delivered to customers. Notably, in the ‘Certification Inspection’ stage, precise checks are conducted across six major categories: body/moving/interior & exterior/chassis/electrical/powertrain, with as many as 200 inspection items.
The list of 200 quality inspection items has been newly structured based on Kia’s PDI (Pre-Delivery Inspection) list from its manufacturing plant, adapted for used vehicles.
Kia grants the title of Kia Certified Pre-Owned only to vehicles that have passed all four inspections, including the 200 inspection items.
Beyond vehicle quality, Kia has also focused on the emotional satisfaction of customers.
To give certified pre-owned customers a sense of the newness akin to that of new car buyers, Kia is the first in the used car industry to provide a protection package typically offered to new cars for its certified pre-owned vehicles.
Before delivering the vehicle, Kia applies an eco-friendly seat cover (dustbag material), protection film to key areas such as the steering wheel and Kia logo, and provides premium glass coating to enhance the emotional value for used car customers.
Kia offers a warranty period equivalent to the free warranty period provided during the sale of new cars, plus an additional one year or 20,000 km for certified pre-owned cars purchased. (The longer warranty period between the remaining new car warranty and the certified pre-owned warranty will be provided.)
Kia has established a logistics facility named ‘Kia Certified Pre-Owned Yongin Center’ in the ‘Auto Hub’ complex in Yongin, Gyeonggi-do, spanning three buildings with a total floor area of 5,334 square meters (approximately 1,614 pyeong) to manage final package work, outgoing inspections, inventory storage, and deliveries in collaboration with specialized merchandising companies.
Kia has completed the establishment of merchandising processes based on the complete vehicle quality management system designed by Kia at the collaborating merchandising center (located in Suwon, Gyeonggi-do). Kia’s specialized inspection and certification personnel will ensure the quality of vehicles at each stage of the process.
The collaboration center can process up to a maximum of 70 vehicles per day, totaling 18,000 vehicles annually, and Kia plans to expand its merchandising capacity in line with customer demand. As a complete vehicle manufacturer with an extensive repository of vehicle-related technologies and data, Kia is committed to providing transparent and objective vehicle valuation standards and processes, having developed a big data-based used car pricing engine.
This initiative aims to offer customers reliable selling and purchasing prices.
Initially, the ‘Buy My Car’ service is focused on allowing customers to wisely choose the vehicles they want based on rich information.
Customers can examine the interior and exterior of the vehicle in detail through the ▲ 360° VR images, review the inspection results of 200 items, assess product details based on the results, check the recent transaction history of similar models, and accurately verify options equipped on the vehicle.
Kia provides a service that recommends vehicles based on big data according to customers’ gender, age, and region, allowing customers to search for the vehicles they want through category filters such as price range and color.
In the ‘Sell My Car’ service, Kia transparently purchases customers’ vehicles using information from various sources.
When customers enter their name and vehicle number in the ‘Sell My Car’ service, the pricing engine analyzes a large amount of data from various sources, including year, mileage, new car price, and accident history, as well as real transaction data of similar models to display the ‘estimated vehicle value (expected purchase price range)’.
To accomplish this, Kia has secured data from public sources such as the Ministry of Land, Infrastructure, and Transport, the Korea Insurance Development Institute, and various other sources, including auction prices from used car auctions.
Once customers confirm the estimated value of their vehicles and upload pictures, Kia will present the final purchase price by reflecting the vehicle condition information analyzed through the photos, along with the periodic maintenance and option installation records that only Kia possesses.
Kia assesses the vehicle condition based on objective criteria developed internally using the photos taken by customers.
A Kia representative noted, “Once a transparent and credible used car valuation system is established, it is expected to positively influence the residual value of used cars, enhancing customer satisfaction and activating used car transactions.” Kia also strives to provide the same services and membership benefits to certified pre-owned customers as it does for new car customers.
Like new car customers, certified pre-owned customers can receive management services such as warranty services at over 700 direct service centers and Auto Q stores nationwide.
Moreover, when purchasing a certified pre-owned vehicle, Kia membership points equal to 50% (up to 100,000 points) of the points awarded during new car purchases are accumulated, and customers can also utilize Kia Connect services.
Kia membership points can be used not only for new car purchases but also across various services, including Kia maintenance networks, fuel and charging, shopping, leisure, and education.
The connected car service ‘Kia Connect’ will be available for one year at the time of purchase of a certified pre-owned vehicle, including the free usage period provided during new car sales. (The longer duration between the remaining free usage period of the new car and the certified pre-owned vehicle will be offered, applicable only to eligible connected vehicles.)
Additionally, if a customer is not satisfied after taking delivery and using the ordered vehicle, they can receive a refund within seven days.
To expand customer experiences, Kia is planning to construct a certified pre-owned vehicle experience facility called ‘Kia Certified Pre-Owned Experience Park (CPO Experience Park)’ in the metropolitan area, aiming for completion by 2025.
This large exhibition space will allow customers to view over 700 high-quality certified pre-owned vehicles and various car accessories while incorporating advanced services like digital vehicle search.
Especially, the facility will include a track driving area where customers can experience test drives of vehicles they are interested in or wish to purchase right on site.
Kia’s Senior Vice President Kim Ji-min of domestic business strategy stated, “To become a sustainable mobility solution provider in the domestic market, offering services in the used car section aligned with customers’ lifestyles is essential. We are committed to enhancing overall trust in the Kia brand by providing high-quality certified used cars and services to our customers.”
Lee Sang-jin daedusj@autodiary.kr