Kia throws first punch of 2010

Europe's incentives war officially began before the first workday of the new year ended.

Kia announced late Monday that it would kick off 2010 by offering its seven-year warranty on all the cars its sells in Europe. The longest warranty currently available in Europe previously covered just the Cee'd compact and Sportage SUV made at Kia's plant in Zilina, Slovakia. Korea-made models such as the Soul and Sorento were covered for five years while the rest of the lineup came with a three-year warranty.

In a statement, Kia Motors Europe Chief Operating Officer Paul Philpott, said the incentive is part of the Korean automaker's aim to become No. 1 in the world for customer satisfaction.

An even more important reason to offer the extra-long warranty is to prevent sales from nose-diving in 2010.

Kia and sister brand Hyundai were two of the biggest beneficiaries of scrapping incentives offered for much of last year by governments in major European markets such as Germany, France, Spain, Italy and the UK.

In Germany, Kia's new-car registrations were up 65.5 percent to 51,338 units through November thanks largely to scrapping incentives that slashed 2,500 euros off the already affordable Picanto minicar and Cee'd.

That gift from Berlin is gone and so are the thousands of customers who bought their minicars, subcompacts and compacts in 2009 instead of 2010 to take advantage of the subsidy.

Kia knows that mass-market brands will have to fight harder than ever this year to maintain sales volumes. The feisty Korean brand has thrown a solid first punch in what will be a long, bloody and costly fight.