Kia Motors Corporation is in the final phase of evaluation on an entry to India
Independent research from industry sources reveals that Kia Motors is expected to make its formal announcement on the India entry in the first quarter of next year. The first product from Kia will likely take at least two-years to hit the Indian roads.
As it orchestrates the India entry, the biggest challenge for Kia Motors is to not hurt sister firm Hyundai Motor Corporation (HMC), as the two brands have an almost similar products line up.
In the Korean market, Hyundai and Kia have a very thin demarcation. The former comes as a maker of sedans and compact cars while the latter has the image of a sports utility vehicle (SUV) manufacturer.
In India, the differentiation will be very crucial. Experts suggest that Kia needs to position itself as a slightly premium brand.
Both Kia Motors and HMC have been facing pressure on their profitability. Kia Motors reported $459 million of operating profit in the third quarter ending September 30, a decline of 22.5 percent from a year earlier, while HMC posted a 29 percent drop. In such a scenario, it becomes very imperative for the Hyundai group to look for new markets. India, the fifth biggest automobile market and one of the fastest expanding, becomes an obvious target as it offers immense potential for growth. Kia Moto.
In October, Hyundai and Kia saw their combined domestic market share plunge to 58.9 percent, the lowest in 16 years, as quality issues and a labour strike hit their image. Their market share has shrunk from 73.6 percent five years ago, owning to increasing import from German manufacturers.
Han-Woo Park, the current president and CEO at Kia Motors, has seen the Indian market very closely while he served as head of Hyundai Motor India. He has already built a core team of people who helped him build HMIL.
By 2020, the car maker plans to launch 98 models globally, which include 37 new and next generation models and 61 derivative and refreshes.
By Baishakhi Dutta
