International Business - Kia Motors Corporation South Korea

This Market Entry Strategy Project will show how the KIA motor corporation from South Korea export their products to Copenhagen, Denmark next year. This project will show the information of the company and their products, the reason why they choose this city and their target market, the opportunities presented by the demographics and how the company determined the best estimate as to the potential market for the product in the city. Second, this report will show the three challenges for taking the product in the city and the company’s recommended approach, how the company will do to solves these challenges they might face when taking the product in the city. Final is the entry modes, this will show what is the most appropriate entry mode the company will choose for the product in Copenhagen, Denmark and the reason why they choose that entry mode.

Kia Motors Corporation was founded in May 1944 and is Korea’s oldest manufacturer of motor vehicles. From humble origins making bicycles and motorcycles, Kia has grown – as part of the dynamic, global Hyundai-Kia Automotive Group – to become the world’s fifth largest vehicle manufacturer. The company’s target market is Copenhagen, Denmark. The reason because this city is less congested and Copenhagen has been transformed into a city for the wealthy. As wage levels and housing prices continue to soar, low-wage earners are literally getting priced out of town, so a lot of people will buy their private vehicles. Their target market in this city is middle class and upper class, people from age 24 to 45 live single or with family, people who used car every day and have environmental conscious. The company’s opportunity is road transport, both trucking/hauling and personal transport such as taxi services, dominates the domestic transportation sector in Copenhagen. Middle class rate is over 60% of the population in Denmark so their products will focus on middle class people.

There got 3 problems when sending a car from Korea to Copenhagen. First, is government, Copenhagen is one of the most expensive country in the world. The reasons is because when they buy a car they need to pay 180% of the purchase money as tax. Also they need to pay for a registration tax fee and annual circulation tax for every year. When we send a KIA car to Copenhagen, tariff may also be a formidable task. Generally prices for the car is expensive. Therefore, if they need to pay for a tariff citizens will not be attracted to getting a car and also the government has not permitted the administration of KIA car. 

Second reason is in regards to the competitors. Actually, Copenhagen does not have a local car brand. One of the Copenhagen’s brand is that Zenbo and Ford. But most of them manufactures sports car. Therefore, they imports car from other countries. This year, Copenhagen's highest selling vehicle is Peugeot, Toyota, ford, mini, BMW and fiat. Copenhagen’s car market is totally saturated with imported cars. 

The last reason is environmental. Copenhagen’s government priorities environmental cleanliness. Cars that exhaust and gives out more gases pays higher taxes whereas vehicle that runs on clean energy are exempted from the green tax. Hence, when bringing KIA into Copenhagen, we should be mindful and be environmental friendly to appeal more to the citizens.