New Delhi: Kia Motors Corp. is developing a hatchback and a mid-size sedan for India in a product offensive as it seeks to challenge established rivals Maruti Suzuki India Ltd and Hyundai Motor India Ltd, among others, in this growing market. Kia Motors, which is owned about a third by Hyundai, plans to start selling the two cars within a year of introducing its first product, a sport-utility vehicle, in India, two people with direct knowledge of the development told Mint.

Kia has already discussed its plans to develop the two products—codenamed KP1 and KP2—with its vendors in India after receiving an approval from its headquarters in South Korea, said the people cited above.

“The hatchback that Kia is planning to bring into the Indian market will compete directly with Hyundai Elite i20 and Maruti Suzuki Baleno. This (strategy) makes sense since these are the segments that are doing well and will continue to attract customers in the future as well," said one of the persons cited above.

“In the midsize sedan segment also, the company will throw a challenge to the Maruti Suzuki Ciaz facelift and Hyundai Verna as the quality of the products will be good and the management of Kia both in India and Korea know the India market well enough," he said.

A spokesperson for Kia Motors India didn’t respond to an emailed request for comment.

The domestic passenger vehicle market mainly comprises hatchbacks, sedans and compact SUVs. All the segments are dominated by Maruti Suzuki and Hyundai, the country’s first and the second-largest car maker. SUVs have outpaced car sales growth in the past few years.

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To capitalize on this robust demand, Kia Motors will introduce a SUV based on its SP Concept, which made its global premiere at the Auto Expo in February.

The company is building a factory in Anantapur district of Andhra Pradesh with an initial capacity of 300,000 vehicles a year. The factory is scheduled to open next year.

Kia is likely to introduce its SUV in the second half of next year, coinciding with Diwali when demand for consumer goods traditionally peak.

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