KGM Motors UK is in a counter-intuitive position for a car company – it does not want its dealers to sell too many vehicles.
The business – the UK distributor for the South Korean manufacturer KG Mobility – is keen to remain within the ‘small volume manufacturer’ derogation under the UK Government’s ZEV mandate.
So long as it sells fewer than 2,500 cars and 2,500 commercial vehicles each year, the company can apply for an exemption from the mandate, meaning it does not have to worry about selling a specified proportion of EVs each year or facing fines for non-compliance.
KGM Motors UK is in a counter-intuitive position for a car company – it does not want its dealers to sell too many vehicles.
The business – the UK distributor for the South Korean manufacturer KG Mobility – is keen to remain within the ‘small volume manufacturer’ derogation under the UK Government’s ZEV mandate.
So long as it sells fewer than 2,500 cars and 2,500 commercial vehicles each year, the company can apply for an exemption from the mandate, meaning it does not have to worry about selling a specified proportion of EVs each year or facing fines for non-compliance.
Ensure you always get AM insight. Make us a preferred source of news on Google.
Kevin Griffin, managing director at KGM Motors UK, explains to Automotive Management: “We work very hard, actually, keeping the registrations below 2,500 both on cars and on commercials.
“We don’t see the point of paying the government any fines for going above that.”
KGM’s stance comes despite the presence of the fully electric Torres EVX in its range, and the imminent arrival of the Musso EV, which could potentially allow it to reach ZEV mandate compliance.
However, Griffin says: “To do that, we would then need to be pushing dealers harder to sell cars. And that’s not what we want to do.
“We see the partnership with the dealer being exactly that, a partnership where we are not putting pressure on them and beating them up to pre-register cars. We do not ask our dealers to do pre-registrations. We don’t phone them up at the end of the month and ask them to do 500 cars.
“Our business is very much based on a relationship with the dealer network. We both work together to be successful.”
Collaborative approach with KGM dealers to continue
As Griffin explains, KGM’s policy has sometimes placed it in the unusual position of some of its dealers pressing it to sell more vehicles, rather than the other way around.
He concedes that there will be a time when KGM needs to break through the 2,500 barrier – but insists that the decision to do this will be a collaborative one.
He says: “The dealers will push us to sell more cars and there comes a point when that’s exactly what we’ll have to do, and we’ll have to break out of the ZEV mandate derogation into the next level, but we will do it when the majority of the dealer network are comfortable with that. Because again, it’s important the partnership works for both of us.”
The government is currently conducting a review of its ZEV mandate policy, which the motor industry has urged it to expedite. In the event that a loosening of the targets was to emerge that could allow KGM to up its sales without penalty, Griffin says the brand would be able to respond quickly.
He says: “One of the pleasures of being a company our size is we can react very quickly to any market conditions.
“So, if the market did change, we would sit down and look at it. But because we can react so quickly, we will wait until such time as the government decides what they’re going to do. And then we will make a decision from there.”
Griffin says that the dealer network collaboration seen in relation to the ZEV mandate is also typical of KGM UK’s wider approach.
He says: “We’ve got a strong network, who we are in constant contact with. One of the joys of being a company of our size is any of our dealers can pick up the phone to any of the directors at the company at any point. And there isn’t a committee to make a decision.”
KGM has seen a slight uptick in the size of its dealer network in the past couple of years. However, as with the number of vehicles it sells, this is also not an area where it is looking for growth.
Griffin says: “We want to keep the dealer network at around 75 to 80, which gives us coverage of all of the UK and Northern Ireland, so when a customer buys a car they still have a choice of where to go and then a choice of where to service that vehicle.
“It’s important we still have the choice out there. But we don’t want to be at 120 dealers. Because at 120 dealers, we would need to push the volume up.
“We know that’s what competitors do. We’re quite happy for them do that.”
New KGM model launches attract retail interest
KGM’s most talked about UK vehicle launch in 2026 is the fully electric version of its Musso pick-up truck. This is a model that’s expected to attract plenty of fleet demand – however KGM says that currently it is seeing just as much interest from retail buyers.
Griffin says: “The small business market – your builders and your plumbers – have shown an interest in it, because it does exactly what they need it to do. Although the vehicle doesn’t carry a tonne, very few people ever actually carry a tonne into the vehicle, so it will do the job they need it to do. And at the price of it, they are very interested in it.
“We were never sure what market was available for an electric pick-up, although we know there are competitors that are much more expensive. We were thinking ‘well, let’s see what the reaction is’. And it’s been fantastic and the dealers’ reaction to it has been fantastic.
“We had the vehicle at a dealer event, and I think it shocked them how well the vehicle was presented to them.”
The most recent update to KGM’s car range was the introduction of full hybrid versions of its Actyon and Torres SUVs – the first full hybrids the brand has introduced, in what it describes as a timely move following the introduction of increased VED rates last year.
Griffin says: “The dealers were pleased that they now had hybrid vehicles to go into the market with as opposed to straightforward ICE vehicles.
“It’s important that we give the dealers vehicles that they can go into the retail market with and be competitive.
“What we’ve found is the dealers are so pleased with the vehicles that they’re not only taking the customer out for a test drive, they’re actually telling them to take the car away for a couple of days, as they’ll enjoy driving the vehicles.”
An area where KGM’s range has shifted based on dealer feedback is moving to a single trim level option with many of its models, with the aim of reducing complexity for dealers and customers.
Griffin says: “There’s none of this ‘come and buy your car at a price’ and then when you go in, the car you actually want is this price, because it’s got all the extras on it.
“We just go ahead and say this is it, this is us, and we are happy with the product and we hope you are too.”
KGM moving ahead after rebrand ‘challenge’
KGM UK is two-and-a-half years removed from rebranding from its previous name SsangYong, in a move which reflected the rebranding of the global South Korean-based operation.
Griffin says: “It’s been a challenge. It always is a challenge when you rebrand anything. And it happened at the same time as we had a lot of new entrants into the market.
“So, it was important to let people know that KGM was a South Korean brand. And we pushed very hard on that to identify the vehicles as coming from South Korea.”
The next development in the KGM model range is due next year, with the introduction of plug-in hybrid technology. The UK operation’s focus for the rest of this year is on bedding in the above-mentioned new additions, along with the new Musso Rhino, the latest diesel-powered version of the pick-up.
Griffin says: “It’s about settling those new models into the market before you bring in the next new model.
“We like to see a nice steady build of our current model range before we move on again.”