Having made inroads intoIndia's utility vehicle market, the Korean carmaker is also upping the ante on the export front.
14 Mar 2020 | 16573 Views | By Ajit Dalvi
Kia Motors India is on a roll and how. In a scant seven months, the relatively unknown brand in India has now become a familiar face and is a rival to contend with for established OEMs. Not only is the Korean carmaker now a force to reckon with in the ...
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Kia Motors India is on a roll and how. In a scant seven months, the relatively unknown brand in India has now become a familiar face and is a rival to contend with for established OEMs. Not only is the Korean carmaker now a force to reckon with in the domestic market but it looks like the company wants to extend its impact to make-in-India exports too.
Right from the launch of the Seltos, its first product in India, on August 22 last year, the company has seen surging demand for the SUV and till end-February 2020 has sold a total of 74,320 units, which works out to a monthly average of 10,617 units. And this sort of a performance in a hugely depressed market. Not surprisingly, the Seltos is the No. 1 UV in the country right now.
Add 2,070 units of the recently launched Kia Carnival MPV and what you get is Kia Motors India's total sales of 76,320 units in seven months, giving it a utility vehicle market share of 8.53% and putting it ahead of established UV rivals like Toyota Kirloskar Motors (6.92%), Tata Motors (6.27%), Ford India (4.67%) and Renault India (4.58%). Kia raced to 75,000 unit sales in just seven months. Imagine what Kia's sales and market share would have been in happier times in the Indian automobile market.
Gunning for exports too
For Kia Motors and its India arm, shipping made-in-India vehicles is a no-brainer and the company had factored this into its India manufacturing strategy when it set up operations at its 300,000 units per annum plant in Anantapur, Andhra Pradesh. In 2019, Kia Motors India manufactured a total of 54,525 units.
In the April 2019-February 2020 period, the company has produced a total of 88,671 units comprising 85,979 units of the Seltos and 2,692 units of the Carnival. It is understood Kia's manufacturing plan will see around 170,000 units produced in 2020, growing to 230,000 units in 2021 and achieving capacity utilisation of 300,000 units by 2022.
Making India a global export hub for some of its key models is an intrinsic part of Kia Motors' strategy to generate economies of scale and drive down costs. Export volumes and strong demand anticipated from the domestic market could see the carmaker run out of production capacity. That would mean two years from now, Kia could be scouting for a new location to set up its second plant in India.
In the fiscal year to date, Kia Motors India has shipped 18,876 units. The company's export journey began in September 2019 when it shipped 471 Seltos SUVs from Chennai Port to South America. With this performance, Kia is seventh-placed among the 20 passenger vehicle manufacturers in India.
Kia's outstanding performance in India is already making an impact in Kia Motors' global scheme of things. In February 2020, its domestic market sales of 15,664 units – its highest sales in seven months – saw it account for 8.33% of Kia Motors' global sales of 187,844 units (-5% YoY).
For 2020, Kia Motors is targeting global sales of 2.96 million units, with a ‘golden cycle’ of new models helping the company counter the low-growth trend across the global auto industry. In India, in August this year, the Korean carmaker will launch its third model, the Sonet compact SUV. The tech-laden Hyundai Venue and Maruti Suzuki Vitara Brezza fighter, available with a wide variety of powertrains, is expected to carry a sticker price of about Rs 700,000-11.5 lakh (estimated, ex-showroom).
Read more: Kia plots midsize MPV for India, launch planned after Sonet compact SUV