Kia starts pilot of last-mile delivery service in Singapore

By CARSIFU | 8 February 2021

Ahn (left), and S.lab Asia Inc CEO Suah Lee, at the MOU-signing ceremony in Seoul.

SEOUL: Kia is partnering cold chain startup S.lab Asia Inc to lay the foundation for the South Korean carmaker's innovative Purpose Built Vehicle (PBV) business to break into Singapore's last-mile delivery market.

Both companies 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 optimised and modified for last-mile logistics service will be used in Singapore's city centre, in the process responding to the needs of the rapidly growing e-commerce market.

The strategic model will also help strengthen the PBV capabilities and service operations of both partners.

Kia vice-president and head of the PBV Business Group DongSoo Ahn said Kia would leave a strong image of itself as a collaborative partner providing new value to global mobility service companies through the co-operation.

"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," he said.

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.

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 maximising 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 co-operation 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 utilising 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.

Singapore was selected 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.