Is your new car on a storage compound? Inside Kia's scheme to deliberately withhold deliveries
CBC
New Kia vehicles that have arrived from overseas are sitting on a storage lot in Wolverton, Ont., purposely locked up even though customers have been waiting months and months — some well over a year — to get their vehicles.
The new cars are being withheld from Kia's Ontario dealerships — and reportedly from many more across the country — as part of a controversial plan by Kia Canada to game the number of sales in the last six weeks of the year.
Go Public has obtained a video in which a Kia regional manager explains the scheme — passed down from top Kia executives — to more than 100 dealership reps in Ontario during a Nov. 17 video call.
"All of you are gonna be very unhappy with me today," said Kia's central region manager Vince Capicotto as he outlined the plan, which he said would roll out nationally.
Instead of shipping all the vehicles to dealerships, Capicotto told the dealers only some will be released — the rest will remain on various compounds until the new year.
The reason for this, he explained in the call, is to avoid appearing too successful in the eyes of headquarters in Korea.
"With the global slow down, Kia Canada wants to control wholesale and retail performance in 2023 to not show high over-achievement," he said.
"There's a high risk with over performance that Kia headquarters will not provide Kia Canada resources necessary in our budget for 2024 to have a successful year if we over perform for the balance of 2023 at too high a rate."
According to Capicotto, Kia Canada has hit its target of selling 84,000 vehicles for 2023. He said there was concern that if sales continued to go well, headquarters would decide Canada didn't need marketing support in the new year and would cut back on that.
An auto expert says it's a very unusual move for Kia Canada.
"It is normal for automakers to use creative strategies at the very end of the year," said Shari Prymak, senior consultant at Car Help Canada, noting this includes pre-registering vehicles toward the end of the year so they can show higher sales.
"Usually, those strategies are to help increase sales, not reduce them," he said.
Capicotto did not respond to Go Public's request for an interview.
A spokesperson for Kia Canada declined an interview request, and declined to answer many of Go Public's questions. In a written statement, she said she could not comment on "confidential internal business matters," including whether the information was accurate.
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