Home >Auto News >Despite auto slump, Kia Motors hits the gas on new car launches in India

MUMBAI : Kia Motors will continue with its ambitious product introduction plans for India, undeterred by the worst slump in sales in nearly two decades in the world’s fourth-largest automobile market.

The South Korean automaker and the latest entrant to the Indian market plans to introduce half a dozen new vehicles over the next three years, said Kook Hyun Shim, chief executive officer and managing director of Kia Motors India.

A key focus will be on the utility vehicle segment, which is largely dominated by Hyundai Motor India Ltd, Mahindra & Mahindra Ltd and Maruti Suzuki India Ltd.

Besides the Seltos mid-sized sport-utility vehicle (SUV) which went on sale on Thursday, the company has lined up a premium multipurpose vehicle (MPV) and a compact SUV, Shim said.

“We will introduce new car every 6-8 months and this is our internal target also," Shim said. “We remain focused on the UV market in India because this segment is also strong point for Kia globally."

Kia, a sister company of Hyundai Motor Group, is also studying the most-competitive and price-sensitive compact car segment in India and has plans to develop products for this market over the mid to long-term, Shim said. He said however that the evaluation is currently in early stages.

“In the long run, we will also get into the compact car market. We are studying this space in India. We are just beginning to understand this market here and there is nothing fixed on the ground on this at the moment," Shim added.

The company has launched Seltos, its first product for the domestic market, with an aggressive starting price tag of 9.69 lakh (ex-showroom). Offered in 16 variants across three BS-VI-compliant engine options—1.5 petrol, 1.5 diesel and 1.4 turbocharged petrol—the Seltos range will take on the likes of Hyundai Creta, and other models such as Mahindra XUV500, Renault Captur and Nissan Kicks. The Seltos will also target buyers of the recently-launched Tata Harrier and MG Hector SUVs.

Kia claims to have already received more than 32,000 bookings for the feature-loaded Seltos. “We have already produced more than 5,000 units from our Anantapur (Andhra Pradesh) plant and we do not plan to close bookings (to catch up with the demand)," said Manohar Bhat, head, sales and marketing, Kia Motors India. MG Motors temporarily suspended bookings of the Hector SUV in July saying it could not cope with overwhelming customer response because of limited production capacity.

Analysts say that the Seltos will cannibalize sales of Hyundai Creta with its feature-loaded packaging and aggressive pricing.

“Kia Seltos will clearly impact Hyundai Creta volumes. However, it is yet to be seen how Kia fares on the long term factors including ownership costs, service and repair costs and resale value," said Gaurav Vangaal, country lead, LVP forecasting, IHS Markit.

Despite its robust launch plans, Kia is worried about the economic downturn as a protracted slowdown in the auto market could affect its original plan to achieve break-even on its investments in India, Shim said. “Yes, we are worried about the current economic situation in the domestic market. However, we do think that this is going to be a short-term cycle," he said, assuring that the economy will bounce back in the mid- to long-term.

“Anticipating consistency in the initial market response for Seltos, we will still take more than three years to break even in India," he said.

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