Kia announces India entry

After exploring an entry into India for several years, Kia Motors, the sister brand of Korean carmaker Hyundai, today announced its foray into the country. Kia will build a manufacturing facility with an annual capacity of 3,00,000 units in Andhra Pradesh starting later this year. It signed a memorandum of understanding with the state government for the construction of the greenfield plant.

An investment of $1.1 billion (around Rs 7,050 crore) will go into the plant, which is spread over 536 acres. Production will begin in the second half of 2019, and sales by the end of the same year. The Korean carmaker also specified plans to produce an India-focused compact sedan and compact SUV.

Kia intends to differentiate itself from Hyundai and develop its own identity in India. "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, while speaking to Autocar India.

When launched, there will be around 40 percent localisation in the Kia models, said Tae-Hyun Oh, adding that the carmaker will want to achieve complete localisation just like Hyundai India in the long term. The company will share powertrains and assembly lines with Hyundai for greater economies of scale.

At present, Kia is conducting a feasibility study to ascertain the right models for launch. Interestingly, it is looking not just at mainstream models, but also the premium segment. "We are looking at a premium model, a mainstream model and a brand image model as well. We will announce the product strategy after the end of the feasibility study," said Tae-Hyun Oh.

The Kia Sportage SUV, which was seen testing on Indian roads, could be the premium model in the company's line-up. It is one of Kia’s oldest models on sale globally and is a direct rival to Tucson. In India, the vehicle is likely to share the Tucson 2.0-litre diesel. The other models likely to be introduced include the Picanto and the Rio hatchback. It could also bring to India the recently unveiled Kia Stinger, which will act as a brand builder. The Stinger is a rear-wheel-drive sports sedan powered by a 3.3-litre, twin-turbocharged V6 engine making 370hp.

Kia aims to develop a strong dealer network in the country as it looks to set itself apart from other carmakers, said Tae-Hyun Oh. "A strong dealer network is the key. Otherwise, even though we have a nice product and we spend tonnes of money, we will not be successful. I will mobilise the best dealers for the Indian market."