There has been a lot of
speculation about car manufacturer Kia Motors of South Korea making an entry
into India. According to highly placed sources, Kia is definitely on its way
into India and is actively considering setting up operations in the country.
But its strategy to enter India, whether it would be a standalone business, or
a shared business with Hyundai Motor India, its product portfolio, etc, all
these are a long way from being finalised.
“We at Kia Motors are
continually evaluating potential locations for overseas manufacturing
facilities, including India, to secure additional engines for future growth.
However, as of now no concrete plans have been finalized,” said Michael Choo, General
Manager, Overseas PR Team, Kia Motors Corporation in a communication to Motown
India on being asked about Kia plans for India.
For those who are not aware, Hyundai
Motor Company currently owns a 33.88pc stake in Kia Motors. Kia Motors is an
owner in 19 different Hyundai companies. Hyundai Motor Company is also a
subsidiary of the Hyundai-Kia Automotive Group.
Hyundai Motor India is a
subsidiary of Hyundai Motor Company. Senior analysts at Motown India are of the
opinion that Hyundai Motor India will gain significantly if Kia Motors sets
base in the country. First and foremost, Hyundai Motor India will be able to
collectively have a much larger share in the Indian car market, especially now
that the gap in sales between Hyundai and the largest car maker Maruti Suzuki
is unlikely to be bridged with its current portfolio of products.
It is to be seen whether Kia
and Hyundai enter into a similar operation like the way the Renault Nissan
Alliance has done in India wherein the two car makers Renault and Nissan share
one common manufacturing plant in Chennai in the state of Tamil Nadu.
& Only Obsession
Come to think of it, Hyundai
Motor India has one and only one obsession: To beat Maruti Suzuki in domestic sales.
No matter what it has been trying, Maruti seems to maintain its lead in terms
of domestic sales in the country. For the period April to August 2016, Hyundai
Motor India recorded domestic sales of 207910 units, registering a 9.80pc
increase, according to data provided by Society of Indian Automobile
Manufacturers (SIAM). During this same period Maruti Suzuki sold 568010, or
much more than double what Hyundai sold in India. Though Hyundai scores over
Maruti in exports--- 70,893 units as compared to 48908 units for the period
under consideration--- this figure is not very significant..
Even though Hyundai came into
India with a bang, with Bollywood superstar Shahrukh Khan endorsing the Hyundai
Santro, it could never really catch up with Maruti Suzuki when it came to the
mass market. The South Korean company has been beaten in almost every
department when it came to sales numbers of Maruti Suzuki.
Hyundai Motor India, like many
other auto majors in the world conducts clinics for new cars to be launched in
India and has been toying with the idea of bringing in the new Santro as well
as its highly priced luxury models under the Genesis brand. These luxury cars
are doing extremely well in some of the developed markets like the US. Though
customer focussed studies etc have been conducted in the country, Hyundai has
still to decide whether to bring in the luxury brand in India where names like
Mercedes, BMW and Audi are not only popular among the well heeled, but have
gained a lot of acceptance.
Even while Hyundai is
contemplating bringing in new brands and models into India, Maruti Suzuki has
been going all out to increase its market share despite having limited number
of revolutionary models. The company even set up exclusive Nexa outlets for
sale of premium vehicles from its portfolio. These Nexa outlets have become a
great success and Nexa dealerships are showing signs of great progress.
What has Kia
Kia may be an unknown brand
among the masses in India today. But then so were the others who came and
established themselves in India. With rising incomes of Indians and the growing
influence of the digital space, Kia should not find it difficult to establish
itself in India and strengthen the hands of Hyundai. The company makes not only
small cars but premium SUVs and sedans too. From models like the Picanto, Rio,
Venga, Soul and cee’d, among others which are powered by engine capacities of 1
litre and above, to big sized models like Sportage and Optima, Kia Motors has a
lot to offer to the Indian market.
Incidentally, Kia cars are available in the markets of Bangladesh,
Nepal, Bhutan, and Sri Lanka.
Kia is also doing great when
it comes to latest technology. In September 2016 Kia introduced its first front-wheel
drive eight-speed automatic transmission. The new FWD 8AT occupies the same
space as a conventional six-speed automatic transmission, and weighs 3.5 kg
less. Kia’s engineers already have experience of developing eight-speed
transmissions for rear-wheel drive vehicles, mounting the transmission
longitudinally and sending power to the rear axle. However, incorporating the
same number of gears into a front-wheel drive car is incredibly challenging,
due to packaging constraints and the need to mount the transmission transversely,
competing with the engine, suspension and auxiliary components for space under
Kia’s new front-wheel drive
8AT is making its global debut in the 2017 Kia Cadenza – on sale across
selected global markets in 2016 – and is featured as standard on Cadenza models
powered by the 3.3-liter V6 GDI engine.
Going forward, Kia’s new
eight-speed automatic transmission will be applied to a number of mid-sized and
larger front-wheel drive models, and will serve as a stepping stone to the
development of future advanced Kia transmissions.
Kia is also determined to
create a distinctive appearance for its vehicles. The Corporation has top
German car designer Peter Schreyer as President and Chief Design Officer of Kia
Motors. He is now marking ten years of leading new car design for Kia, a period
during which the Korean brand’s global sales have risen from around 1.1 million
cars in 2005, to 3.05 million in 2015.
As Kia has transformed its
model range, the proliferation of Korean culture around the world – K-Pop,
‘Gangnam Style’, modern architecture in Kia’s own Korean domestic market, and
the appreciation of Korean art, to name a few – has helped inspire Schreyer and
his design teams.
Peter Schreyer’s design
philosophy is borne out of this Korean inspiration: ‘the simplicity of the
straight line’, which characterizes every one of the designs he has overseen.
The growth of a truly global network of designers has led to different
interpretations of this approach, with design centres now established in California
in the USA, Frankfurt in Germany, and at the company’s Namyang R&D centre
Schreyer says: “What really
excites me is how fast this company is evolving. The brand as you knew it 10 or
even five years ago is gone. You can see it in even the smallest detail. You
can feel it in the sophisticated textures and materials. And you experience it
in ways that are inter-related and connected. As we move forward, it’s
important that change is an improvement and not just for the sake of looking
At the 2016 Paris Motor Show
in end September, Kia revealed an all-new Rio. The all-new, fourth-generation
Kia Rio made its world premiere in Paris. The design of the new Rio was led by
Kia’s design centres in Germany and California, in close collaboration with the
company’s global design headquarters in Namyang, Korea. The appearance of the
new Rio is defined by straight lines and smooth surfacing, giving the car a
distinctive, confident new look.
At the front, the Rio wears
the latest evolution of Kia’s ‘tiger-nose’ grille, now thinner in height and
wider across the front of the car. The new Rio has grown by 5 mm in width (to
The Kia Rio is the Korean
manufacturer’s global best-selling model, with more than 473,000 sold around
the world in 2015. The next generation will enter production towards the end of
2016 for Europe.
Cumulatively through the first
eight months of 2016, Kia’s global sales totalled 1,938,113 units for a
year-on-year increase of 3.0%. Western Europe (293,371 units sold), Korea
(358,160 units sold), North America (492,007 units sold) and China (376,530
units sold) have seen a 14.7%, 7.7% 3.8% and 1.2% rise in sales, respectively.
Kia's bestselling model in
overseas markets during August 2016 was the Sportage compact Crossover Utility
Vehicle (CUV) with 37,400 units sold. The B-segment Rio (known as 'K2' in
China) was the second best seller with 33,762 units sold, while the C-segment Cerato
(Known as ‘Forte’ or ‘K3’ in some markets), Optima midsized sedan and Soul
urban crossover followed with 30,399, 19,804 and 16,635 units sold,
Recently Kia opened a new car
making facility in Mexico, its sixth
overseas production facility at an investment of US$3 billion. The annual
production capacity of this plant will reach 400,000 units, while Kia's global
production capacity would be reaching 3.56 million units. Kia expects the plant
to be operating at full capacity of 400,000 units utilising three shifts by the
end of 2018.
Beginning of 2017, the Mexico plant
will produce the all-new fourth generation B-segment Rio, which had its world
premiere on 29 September in Paris at the 2016 Mondial de l'Automobile.
While it has been officially
revealed that Kia is considering India as a potential market, it is now to be
seen how fast their plans for entering India become a reality. As for Shahrukh
Khan, the ageing Bollywood star, they can afford to give him a pass this time
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