Kia announces India entry

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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 initiate in the second half of 2019, and deals by the end of the same year. The Korean carmaker also specified plans to produce an India-focused compact sedan and compact SUV. Kia aims to distinguish 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. It will not complicate the client with the Hyundai brand, or else our sales will be affected,” said Tae-Hyun (Thomas) Oh, chief operating officer, KIA Motors Corp,

When launched, there will be around 40 percent localization in the Kia models, said Tae-Hyun Oh, adding that the carmaker will want to achieve complete localization just like Hyundai India in the long term. Some of the carmaker’s models are developed on the same platforms as Hyundai globally and the company will look at sharing powertrains and assembly lines in India as well, to share development costs and achieve greater economies of scale. At contemporary, Kia is leading 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 first-class model in the firm’s line-up. It is one of Kia’s eldest models on sale globally and is a direct rival to Tucson. In India, the vehicle is likely to share the Tucson 2 liter diesel. The other models likely to be introduced include the Picanto and the Rio hatchback. It could also carry to India the recently revealed 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 improve a strong dealer network in the country as it looks to set itself apart from other automakers, 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 mobilize the best dealers for the Indian market.”