[ S1 = Mr Jean-Charles Lievens ] Thank you [ name here ] and good afternoon ladies and gentlemen.

3, 4, 18, 29, 35, 45, 46, 70, 85, 500, 10.000, 180.000, 280.000, 500.000 / These are not winning lottery numbers / These are not the odds against Trinidad & Tobago winning the World Cup either! / They are the bald facts and figures behind the success of and they might be surprising.

[ S2 = Facts & figures behind our success ] 3 New additional Kia factories producing 300,000 vehicles each 4 Successive years of profitable growth. 18 Months – the duration of Kia’s intensive dealer recruitment campaign. 29 Markets under the control of Kia Motors . 35 % Percentage of market segments covered by Kia in 2003. 45 % Sales volume rise in percentage terms each year for last three years. 46 % The European share of Kia’s global exports in percentage terms. But Only 70 Total staff number at Kia’s European HQ.

[ S3 = …facts & figures behind our success ] 85 % Percentage of market segments covered by Kia today. 500 New dealers appointed by Kia in last 18 months. 10,000 Job applications to work at Kia’s first-ever factory in Europe. 180,000 Picantos supplied since our entry into the A-segment. 280,000 Total number of vehicles delivered in Europe during 2005. 500,000 Total number of vehicles we intend to deliver in 2010 in Europe.

Surprising facts and figures about Kia… In the last five years in Europe, we have grown sales, made money and laid the foundations for sustainable long- term prosperity.

[ S4 = Why are we so successful? ] So, why are we successful in Europe? Partly because we strive to fully understand our customers and their needs, while positioning ourselves to respond rapidly to market trends. / And partly because of the careful consideration we are giving to European consumers’ requirements.

Our long-term vision is to become one of the leading automotive brands in Europe, by placing the European Continent at the focal point of all of our global business strategies, from product development and design to marketing and after-sales activities.

Part of our strategy is also to change consumer perceptions of Kia as a ‘foreign’ manufacturer, and instead, to be seen as a good ‘European Citizen’. / By building our first assembly plant in Slovakia, creating jobs for more than 10,000 people, and by supplying markets with ‘Europe Only’ models made here in Europe, we are confident we will gradually change how we are viewed. / Our investment in Slovakia is not an invasion, it’s a collaboration – and a collaboration on a massive scale.

[ S5 = Crossroads of Change ] In the automotive world, we are all at the crossroads of change. / The focus of attention is moving from West to East – both within Europe and across the world in China, India and Asia – and with that move comes different challenges for our industry.

Kia is well positioned globally to benefit from these many changes, thanks to its worldwide strategies. / We already have under construction new manufacturing plants in Eastern Europe, and in China. We already have component synergies and economies of scale in place with Hyundai in Central Europe.

What experiences can other auto makers learn from Kia’s strategy? What lessons can they take on board and adapt for their own ventures in Central and Eastern Europe and the Chinese markets? The answers are many and varied and will emerge throughout my presentation.

[ S6 = Automotive ‘Buzz’ ] Change is exciting as well as challenging. I’m sure we all get a thrill, a real buzz from working in this industry which is so often packed with surprises – and so often, hard to predict. / Twenty years ago observers were forecasting that only six big brands or major groups would survive into the 21 st Century as “the Big Fish” - the giants of the industry - absorbed the minnows. / So what are the results today?

Today we have more brands than ever before, with Korean, with 42 Chinese brands and Indian companies joining the battle for sales around the globe – not just in their domestic markets.

And it is the small brands, those minnows, which are now the thriving survivors, the fittest and most profitable. / OK – many of these brands were rescued by the giants or taken over, in what to some people, seemed like charitable or even questionable ventures. / But today it is companies like Volvo and Mazda, which are keeping Ford afloat. Audi with is an example of the smaller, but more dynamic company, that is acting as the corporate “lifebelt” and bolstering the fortunes of their parents.

[ S7 = Failing to focus… ] Those parents, the traditional giants, may have failed to focus in sufficient detail on the specific needs of individual markets and internal consolidation might have harmed the efficiency of such business models.

It’s not so long since those brands each created ‘world ’ which they intended to impose on customers globally in an early attempt to harvest the benefits of economies of scale. / The corporate view was that customers would, of course, be only too pleased to purchase products from such ‘renowned’ global brands. Now we all know that such confidence, or even arrogance, was badly misplaced…

[ S8 = Staying sharp and hungry ] Kia may not yet be an automotive giant or a truly famous brand, but we are a lean company and a hungry one. / For example, our European head quarters has a staff of 70, while some European and Japanese giants’ headquarters house more than 2,000 people. Admittedly Kia in Korea supports Kia Europe, but even making that allowance 2,000 seems, and is, excessive.

[ S9 = Enormous enterprise ] You may not be aware of the enormous enterprise that Kia has become. / Today, Kia is a global corporation and Korea’s second largest automobile manufacturer. / It has an annual turnover of 14 billion Euros, over 32,000 employees worldwide, manufacturing and assembly operations in 10 countries producing more than 1.5 million vehicles – much more than many better-known brands. / We have 3,300 distributors and dealers in 155 countries. So, Kia has certainly come a very long way in 61 years.

Crucially, despite our unprecedented rapid growth in recent times, we are determined to remain a lean and hungry company, even though we will certainly continue to grow in sales and stature throughout the next decade.

[ S10 = Product-led success ] With the increased sophistication of consumers in Western Europe, it is now accepted that the lure of a low price cannot attract customers in sufficient numbers to build a sustainable and profitable future. / A strong product line-up, appropriate to individual markets, is a crucial ingredient to creating long-term viability. / We can all name one or two failing carmakers with a good product line- up BUT can anyone name a thriving carmaker with a poor product line-up? I think not.

Though relatively small, Kia diversified its products early on, introducing MPV and SUV models – ahead of many of the ‘Big Fishes’ in Europe – because we focused more on customers’ real needs and on local trends. And of course, the opportunity to generate larger profits on larger vehicles was an element which played a part in our decision making process…

[ S11 = Regenerated line-up ] The path to achieving the status of ‘leading automotive brand’ begins with continually raising the competitiveness of our products. / Kia is in the midst of a complete regeneration of its entire line-up.

In a single year, we will have unveiled 6 all-new vehicles in the B and D- segment, MPV segment (New Carnival), compact MPV segment (New Carens) and in September at the Paris Motor-Show, we will introduce our all-new C- segment model specifically designed for, and made in Europe – and then our flagship, the new Opirus.

As well as regenerating our product range, we have expanded our model line-up to provide a broad variety of passenger and recreational models with both gasoline and diesel engines. / Three years ago our products covered just 35% of market segments. / Today we offer competitive products across 85% of the market. We are now a true generalist brand.

[ S12 = Building locally, for local customers ] Kia has a long history of building locally for local customers, with assembly operations using KD kits in: Ecuador, Egypt, Indonesia, , Malaysia, Pakistan, Russia, Vietnam, Thailand and Morocco…a total of a ½ a million units when we include the existing factory in China.

At present, we are boosting Kia’s presence in Russia with the refurbishment of the Izh-Avto plant and the installation of a new paint shop. This joint venture with the SOK Group will see 150,000 C-segment sedans produced for the local market.

When potential sales volumes in a region justify the investment, Kia is quick to commit to full manufacturing locally. / Demonstrating its flexibility, Kia is already building cars in China which are tailored to those consumers’ needs and tastes – consequently our TianLiMa model is hugely successful.

From launch three years ago, sales have soared to more than 130,000 units annually and the has won numerous accolades, including ‘Best small car for customer satisfaction’ awarded by the Chinese Quality Association. Powered by demand for the TianLiMa and the Cerato, our total sales in China during 2005 rose by 76% -- outperforming the 26% market growth.

Last year we announced the investment of €800 million to build our second plant in China. / Due for completion in 2007, this highly automated facility will employ 2,800 people and have an annual capacity of 300,000 units.

[ S13 = First-ever factory in Europe ] The same philosophy ‘building appropriate vehicles and building them locally for local customers’ is the driving force behind the creation of our first-ever plant in Europe in Slovakia. / The significance of this venture cannot be overstated.

The 160,000 square metre building will have six final assembly lines, featuring 320 robots, with the potential for producing 300,000 cars annually. / We are directly employing 2,400 people at start-up, and more than 10,000 jobs will be created locally at 12 new component suppliers’ plants within a 50-kilometre radius.

At present, every Kia sold in Europe is an import, but by 2008 we expect to see a landmark change in our supply chain, with 40% of European demand for Kia products being met by Zilina. Many of the cars will be ‘Europe Only’ models, specifically designed and developed with the needs and tastes of European consumers firmly ‘front of mind’.

[ S14 = Productivity is key to prosperity ] While understanding local consumers’ tastes is key to creating vehicles they will actually buy, plant productivity is the key to selling them at prices the consumers can afford, and to long-term prosperity for the manufacturer.

Kia’s new Zilina manufacturing facility was built fast – in just 15 months. It will build cars fast…but also to very high quality as we are creating one of the most technically advanced plants in Europe.

And it will be these latest advanced production techniques – not just lower Eastern European wages – that will ensure profitable operations for Kia in Slovakia.

Zilina will achieve unprecedented levels of productivity, up to 100 cars per employee per year, when all its systems are fully operational. It will be a very flexible operation, able to manufacture five different body types and six different engines. Over the next four years capacity will be increased and new models added, up to 500,000 sales units annually from 2010.

Some brands complain that they are suffering from over-capacity in Western Europe, while having to import vehicles to satisfy local demand. ‘Over-capacity’ is clearly both a non-sense and a euphemism for plants, which have become too expensive to operate, largely from lack of investment and in creating flexible human relations or by simply producing cars not matching the trends and needs.

[ S15 = How can Koreans succeed? ] While Kia is now a global corporation, it has many laudable Korean attitudes at its core, worldwide – attitudes that have been partly forgotten or devalued in much of Europe and the USA.

Ambition, teamwork, hard work, dedication and focus are all key words in the Kia vocabulary. The Kia culture mirrors Korean culture with its sharp focus on achieving goals and deadlines, taken to the extreme. / The internal drive to perform better than before, and better than competitors and ensure customer ‘delight’ – is highly developed.

[ S16 = Award-winning vehicle quality ] In recent years, we have attached the phrase ‘high quality’ to others – ‘exciting and enabling’ and ‘the power to surprise’ – when describing our brand aspirations and our products. / Those assertions are not just hot air. We are proud of the numerous awards our vehicles are now receiving as their quality is endorsed.

Earlier this year the consumer appeal of the was endorsed by the presentation of the Autobest 2006 award – an Eastern Europe award that is highly regarded for many reasons, including its well-informed judges.

Last month in the USA, Rio was ranked highest in class by the JD Power 2006 Initial Quality Survey for customer satisfaction after 90-days of ownership. This survey is regarded as the industry benchmark for new-vehicle quality and Kia is now ranked by the IQS above many famous brands, including: German, Swedish and Japanese brands.

The credibility of our Sorento 4x4 SUV’s sales successes has been endorsed by many awards. During 2005, Czech readers of Auto Motor and Sport magazine voted Sorento ‘Best Off-road car priced below €30,000’. / In the UK’s annual JD Power & Associates Customer Satisfaction survey, the scored a clear class victory with a triple achievement – best 4x4, only 4x4 with a ‘5-Star’ satisfaction rating and 7 th overall – with a customer satisfaction rating of 84%. Recently Sorento retained first place in the 4x4 class of the 2006 survey.

[ S17 = Warranty costs slashed ] Further prove of Kia’s improved vehicle quality is provided by our diminishing warranty costs. / Between 2003 and 2004 these were cut by 12.5% and last year a reduction of 25% was achieved. / Perhaps most telling, our market research confirms that 50% of Kia owners would now consider a ‘repeat-purchase’ when replacing their current vehicle.

Kia knows that the immense strides it has made in product quality must continue. From this chart about quality you can see that KIA has now caught up with the industry average in terms of quality. Last year, special teams from Korea conducted a global ‘quality audit’ of Kia’s products and operations. That audit will be regularly repeated and each of our R&D centres has dedicated departments pursuing the goal of improved product quality – both real and perceived.

[ S18 = R&D is a top priority ] In recent years, Kia’s investment in R&D has risen from 3.1% of revenue (in 2002) to 5.9% in 2005. Today, Kia’s 3.3 million square metre Namyang facility in Korea with its 7,000 staff is regarded as one of the Top 10 automotive R&D centres in the world. Overseas, Kia operates four R&D facilities in the USA , Japan and Germany.

As part of Kia’s long-term commitment to growth and success in Europe, we have operated our own corporate R&D Centre in Germany since 2003 – jointly with Hyundai. / Representing an investment of 12.6 million Euros, this facility employs 430 staff.

Within this facility our “diesel engineering centre of excellence” is accommodated – playing a crucial role in developing diesel-powered vehicles to match the requirements of the European region.

[ S19 = Dedicated European headquarters ] The most prominent embodiment of Kia’s commitment to Europe is the construction of our brand new European Headquarters in Frankfurt. The €74 million building will house Kia’s Europe-wide sales, marketing and after-sales operations, plus a sales academy, a technical service centre, the company’s Pan-European IT, logistics and purchasing hub and a ground-floor showroom.

This state-of-the-art development will also house Kia’s first solo Design Centre independent of Hyundai Motors. / This important and significant move reinforces the commitment of Kia to be seen in Europe as a ‘stand alone’ brand.

[ S20 = Controlling our own destiny ] A key element of Kia’s European growth strategy has been taking control of its own destiny by steadily acquiring its national distribution companies. / Today, Kia has direct control of its fortunes in 70% of the European market.

In 2005, Kia Motors Corporation realigned its organisation by moving the company’s Eastern Europe headquarters from Warsaw to Moscow and the sales operations in eight Eastern European countries were brought under the organizational umbrella of Kia Motors Europe, based in Germany.

Streamlining our European organization allowed us to build closer relationships with our national markets. / To succeed, you need to build personal relationships, and your investment needs to be in much more than buildings and technology – and in much more than mere money.

[ S21 = Investing much more than money ] Time put in wisely, can be directly related to rewards for your brand. It will probably surprise you to learn that I visit 10-to-15 Kia dealers each month and some 100 dealer candidates each year. / Senior managers at Kia Europe like to get close to our dealers, our local sales staff and even to our customers!

We are strengthening our European sales network both in terms of quantity and quality, to support the booming demand for Kia vehicles. Kia plans to have 2,080 dealers in Europe by the end of the decade, and we expect annual sales per dealer to rise significantly to 275 vehicles by 2012.

[ S22 = ‘Going native’ to ensure success ] It is ambition to develop from ‘the most European of Korean auto firms… to the most Korean of European auto firms…’ That is the vision, which KME has for itself in the years ahead.

And we would suggest that those auto makers who are ultimately the most successful in foreign markets, such as China and India and other major developing markets, will be those who ‘go native’ in the most appropriate way – becoming the ‘most Chinese’ or ‘most Indian’ of the Europeans or Asians… and thereby producing and selling products most suited to their local consumers’ requirements.

Kia is currently “going native” in Europe and in China. / Our product quality is now acknowledged as vastly improved and our sales in Europe are set to climb to more than 500,000 units by 2010.

[ S23 = The key lessons to be learnt… ] And the key lessons to be learnt? Respect every customer and dealer, in every market. Make the investment – in research, design, engineering, manufacturing and marketing – to build and deliver the product he or she actually wants.

And the key words behind success? Product and productivity.

We like to think our company, Kia, is like our vehicles – agile, responsive and continuously improving and renewing itself. / We might be a small fish in the world’s enormous automotive aquarium, but we have qualities, which will ensure we survive and thrive – and do not get eaten up!

[ S24 = Product and Productivity… ] Will heading Eastward be the ultimate solution for a more efficient business model for car manufacturers?

The answer is…NO. Salaries will eventually catch up with those in Western Europe, and suppliers will inevitably raise their prices in parallel. The new battlefield for new localization of production will end up in a price battle for an expanding market.

However, it will definitely give us time and resources to match our product offerings closer to quick changing legislation, to better match customers’ needs and, of course, will enhance our productivity per car and per employee…all of which will make us leaner and more profitable in the long run.

I am delighted to have had this opportunity of sharing with you, the unfolding story of Kia’s future history, as well as the chance to suggest some ways in which the challenges of foreign adventures can be turned into an advantage for all of us.

[ S24 = Thanks… ] Thank you for your attention.