Automotive

Published on February 3rd, 2021 | by Joshua Chin

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Kia To Begin Pilot For Last-Mile Delivery Service In Singapore

This pilot program to be the foundation for Kia in its Purpose Built Vehicle (PBV) endeavour.  

Kia has recently announced that it has partnered with S.Lab Asia Inc. in an attempt to break into Singapore’s last-mile delivery market. With a signing of a memorandum of understanding (MoU) performed last Friday, both companies aim to collaborate on a pilot project which uses a fleet of modified e-Niro as delivery vehicles. 

While this news may seem innocuous enough, there is actually quite a lot to unpack from this recent partnership between the South Korean automaker and this equally South Korean cold-chain logistics start up in Singapore. The largest of which is why exactly does Kia want to enter the Singaporean van market? 

Well things aren’t actually that simple, as the South Korean automaker is using this pilot program to ‘lay the groundwork’ for its Purpose Built Vehicle (PBV) business. Set to launch by the middle of 2021 in Singapore’s city centre, Kia aims to use this pilot program to evaluate the potential for a future PBV-based business model. 

Part of Kia’s wider Plan S future product strategy, the company is hedging its bets for EV-based PBVs to be a large part of future mobility solutions. This is not only with PBVs acting as last-mile delivery vehicles, but also as ‘autonomous shuttles and chauffeur-driven luxury vehicles’ too. 

To hear Kia put it, this program therefore is intended for the automaker to gain ‘core PBV project competencies and experiences’. These will include the development EV-based PBVs optimised for last-mile delivery; advancing the Car as a Service (CaaS) platform for fleets and leasing requirements; establishing an EV charging ecosystem; and creating an EV fleet management services structure.

As for the vehicles themselves, due to Kia’s next-gen PBVs still being in its final testing and optimisation phase, a modified variant of its e-Niro will be used for this pilot program instead. Though no exact details have been officially provided of how this all-electric compact crossover has been modified for the task in hand, a van-like rear cargo bay that will make for the easy loading and unloading of S.lab Asia’s cold-storage boxes in the rear portion is to be expected. 

Working together with local Singaporean partners, Kia aims to establish a collaborative framework in the region in regards to this PBV pilot. Additionally, the South Korean automaker aims to begin a similar pilot operation back in its home market at around the same time with S.Lab Asia. 

With this in mind then, it does beg the interesting question as to when would Malaysian cities be invited to get involved in such an innovative program. Moreover, considering our neighbour across the causeway was the first location for this pilot project to be implemented, why couldn’t any city in Malaysia be used as Kia’s base of operations for its program? 

Unfortunately, Kia actually has an answer to that question. 

According to the South Korean automaker, Singapore was selected as the optimal location for its next PBV project as it can ‘take advantage of the city-state’s world-class infrastructure, vibrant economy and rapidly advancing e-commerce’. Furthermore, ‘instrumental in Kia’s decision was Singapore’s plans to gradually phase out internal combustion engine transportation by 2040 via a forward-looking set of eco-friendly mobility policies, including increasing subsidies for EVs.’

So it could be inferred then that much like any other innovative project that is heading towards our more developed neighbour down south, Malaysians will once again be left out from the involvement in this particular project for a long time coming yet. 

PRESS RELEASE: Kia Corporation has begun to lay the groundwork for its innovative Purpose Built Vehicle (PBV) business, partnering with cold chain startup ‘S.lab Asia Inc.’ to break into Singapore’s last-mile delivery market.

On January 28, the two companies have signed a memorandum of understanding aimed at launching a pilot project in Singapore using the Niro EV and evaluating the potential for a future PBV-based business model.

The Niro EV model optimized and modified for last-mile logistics service will be used in Singapore’s city center, in the process responding to the needs of the rapidly growing e-commerce market. In addition, the strategic model will also help strengthen the PBV capabilities and service operations of both partners.

“Through this agreement, Kia will leave a strong image of itself as a collaborative partner providing new value to global mobility service companies,” said DongSoo Ahn, Vice President and Head of the PBV Business Group at Kia Corporation. “Kia will strive to lead the global PBV market by establishing partnerships with various operators through not only last-mile delivery services but also various open-innovation collaborations.”

Purpose built vehicles – the development of which forms the core of Kia’s mid- to long-term business strategy, known as “Plan S” – are vehicles that are designed for specific applications, such as last-mile delivery, autonomous shuttles and chauffeur-driven luxury vehicles. In terms of Kia’s pilot PBV venture, ‘last-mile delivery service’ refers to the last leg of a product’s delivery from a warehouse hub to a customer, with a focus on maximizing delivery quality and service differentiation.

S.lab Asia is a startup that produces special boxes for cold-chain fresh product deliveries and offers advanced delivery services. It is currently building a logistics network that will sell and distribute fresh products to Korea and Southeast Asia.

As Kia’s next-generation PBVs are currently undergoing final product development and optimization, Kia, in cooperation with S.lab Asia, will use the Niro EV with a modified interior for the ease of unloading and uploading S.lab Asia’s boxes with a maximum loading space. The operations will begin in Singapore in the first half of this year, during which Kia will assess and advance its PBV business model, including product and service aspects, by applying the real-world lessons learned from utilizing the modified Niro EV in Singapore.

Through the pioneering scheme, Kia will gain core PBV project competencies and experiences, including: developing EV-based PBVs that are optimized for last-mile delivery; advancing the Car as a Service (CaaS) platform for fleets and leasing needs; establishing an EV-charging ecosystem; and creating an EV fleet management services structure.

Kia has selected Singapore as the optimal location for its next PBV project, taking advantage of the city-state’s world-class infrastructure, vibrant economy and rapidly advancing e-commerce. Instrumental in Kia’s decision was Singapore’s plans to gradually phase out internal combustion engine transportation by 2040 via a forward-looking set of eco-friendly mobility policies, including increasing subsidies for EVs.

To successfully implement the project, Kia plans to establish a collaborative framework with key partners in this area, including Hyundai Motor Group Innovation Center in Singapore; SP Group, Singapore’s largest EV-charging company; and Kia’s local authorized dealer, Cycle & Carriage.

Kia will also collaborate with S.lab Asia to further develop and optimize its PBV business model for the Korean market, and expand similar services to the country in the first half of this year.

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About the Author

Automotive journalist. Professional work on dsf.my and automacha.com. Personal writing found at driveeveryday.me. Instagram: @driveeveryday



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