There's definitely a lot of buzz surrounding Kia Philippines right now after the local distributor has just announced that they are launching the Stonic; a small crossover that will occupy the critical market position of an entry-level, subcompact crossover for the brand.

But what got us surprised was the pricing of the Stonic. Kia announced that the model will start at PhP 735,000 for the base Stonic 1.4 LX 5MT, PhP 835,000 for the mid-grade Stonic 1.4 LX 6-AT, and PhP 925,000 for the Stonic 1.4 EX 6-AT.

Of course, that wasn't all; Kia said that for customers that decide on the Stonic and reserve a unit up until October 15 (which is the official market launch), they will be entitled to get a PhP 50,000 discount for the LX 6-AT and the EX 6-AT, dropping the prices to PhP 785,000 and PhP 875,000, respectively. For those opting for the base model, the discount is even bigger at PhP 60,000, dropping the price to PhP 675,000.

How did Kia get 2021 Stonic crossover priced so low? image

Yes, even we are wondering how Kia Philippines was able to get the price so low. Even without the discount, the Stonic was already very competitively priced, and could pose to be a serious contender in the small crossover category against the likes of the Juke. It might even take away sales from the traditionally strong subcompact sedan class.

Still, how in the world was Kia able to get a small crossover to undercut so many models, perhaps to the point where even Vios buyers will be thinking twice? Let's see how.

How did Kia get 2021 Stonic crossover priced so low? image

Perhaps the biggest edge that Kia has with the Stonic is the point of origin. Unlike the Seltos which comes from South Korea, the Stonic comes from China (where it's known as the Kia KX1). As you know, ASEAN has a free trade agreement with the PRC, and it really benefits vehicles with small engines at 1.5-liters of displacement or less.

Being Chinese made also means other markets can take advantage of their economies of scale. To put that in perspective, in 2019 Kia sold an average of about 1700 Kia KX1/Stonic units in China. And that's on a monthly basis, and not even at full capacity yet.

How did Kia get 2021 Stonic crossover priced so low? image

The retail pricing of the KX1/Stonic in the PRC also interesting because it indicates the price range of the model versus ours. The KX1 starts at CNY 70,000 (about PhP 497,000) to CNY 85,000 (about PhP 604,000). That means they have plenty of space to play with in terms of pricing.

There's also the cost advantage of having a fairly common set of specifications. There's little variation in specifications among the three variants; the major changes being the different gearbox in the two LX models, and more features (Hill Start Assist, ESC, automatic climate control, push-button ignition, rear sensors, LED DRLs) and different two-tone color options for the EX; the LX only has monotone color choices.

Perhaps the most pressing concern for Kia is whether the Stonic will take away sales from the entry-level Soluto which is currently selling for PhP 665,000 and the base Rio which is at a rather premium PhP 920,000. Kia Philippines president Manny Aligada believes that will not be the case.

Despite the Stonic's initial pricing, Aligada believes that the Soluto and Rio will continue to cater to distinct clients. He said that despite the pricing of the Stonic being close to the Soluto (and less than the Rio), each variant will cater to a specific set of buyers that need a vehicle.