Kia to start India operations by early 2019 with focus on mass market segments

Hyundai owned sub-brand, Kia will open its plant in India in Andhra Pradesh and will start with 40 % localisation in the country

By: | Published: April 27, 2017 11:20 AM

After a number of years of research and wait, Hyundai's sister concern, Kia Motors has announced its entry into India by 2019. The South Korean carmaker will start off by investing approximately Rs 7,000 crore in a plant in Andhra Pradesh with a capacity of three lakh units. Production would start in 2019 with sales of Kia cars by the end of the same year. Despite being a sub-brand of Hyundai, Kia will have a different entity altogether in accordance with their India plan. “From the beginning, we will be different from Hyundai, be it in product, dealer or in advertising. We will not confuse the customer with the Hyundai brand, or else our sales will be affected," said Tae-Hyun (Thomas) Oh, Chief Operating Officer, Kia Motors Corp told Autocar India. When the company will start operations in India, they plan to localise 40 percent parts later on going to a full localisation model.

In order to take a fair share of the already filled up volume product market, Kia will introduce a number of products instead of going one by one. The company will keep its entire operation portfolio different from that of Hyundai in India, according to an interaction between Thomas Oh and AutoX. Although Kia has not confirmed what models will it bring to India, however, after a feasibility study is done with regards to its competitors in the mass market segments, the company will take the necessary steps further. A Memorandum of Understanding (MoU) will soon be signed between Kia Motors Corp and the Andra Pradesh government for their facility in Anantapur district.

The manufacturing plant will have provision for welding, stamping, painting and assembly and forecasts suggest that India will be the third-largest four-wheeler industry in the world by 2020. Kia also stated that the facility will cater to the Indian market first wherein it will also be a supplier to a number of other companies and later on export its cars from the country. In March this year, a compact crossover based on the Kia Rio was spied in India which is likely to be one of the first products from the company. Unlike the previous speculations, launch of this crossover alongside other mass market products will take place by the end of 2019.

Also Read: New Kia crossover spied, India launch possible by early 2019

It'll be interesting to see how Kia positions its products to ensure there is no duplication with Hyundai. Considering the initial localisation rate of 40 percent, it needs to be seen how competitively Kia will price its product since Hyundai already has got its localisation rate to almost 100 percent on certain models. In many markets globally, Kia is seen more as a youthful and sun brand compared to the more matured and luxurious positioning of Hyundai. There's still some time to go before the first Kia model hits the Indian roads but the journey till that point is definitely going to be interesting to witness, given the challenges that lie ahead.

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