Hyundai to soon announce Kia plan for India market

Seoul: South Korea's Kia Motors Corp is likely to announce its plans for the Indian market over the next six months as it finalises finer details on the product mix, production, sales and marketing strategies.

According to the sources, as and when it decides to set up operations in India, the car maker may set up a plant with an initial production capacity of 2.5 lakh per annum with an option of scaling it up later.

"It will take some time to come up with final decision on India entry. It should at least take around six months to announce it formally," a source said. The company would, however, need more time to actually start rolling out vehicles as it would need to establish manufacturing operations.

Kia, a part of the Hyundai group, is scouting for land in various states, including Andhra Pradesh and Telangana. When contacted, a company spokesperson said: "We at Kia Motors are continually evaluating potential locations for overseas manufacturing facilities, including India, to secure additional engines for future growth.

However, as of now no concrete plans have been finalised." It is understood that the company is working on how to overcome the challenge of having a clear distinction for its product portfolio from that of Hyundai, which is already the second the largest car manufacturer in India after Maruti Suzuki India.

The source said, "When it comes to sales network Kia will have its own dealers." Kia also plans to manufacture its engines in India, whenever it decides to open shop there, the source added.

Kia' global production capacity currently stands at over 3 million units while Hyundai's global production capacity is around 5 million vehicles annually. Globally, Hyundai shares parts and vehicle underpinnings with Kia, which it acquired in 1998. 

Hyundai sells several low-priced vehicles in India, which could pose a challenge in terms of market positioning for Kia, which sells a range of vehicles including a compact crossover utility vehicle brand, Sportage; an urban crossover brand, Soul; compact car Rio; and mid-size and luxury sedans under the brand names Optima, Cadenza and K900. Kia also has hybrid and electric vehicles on offer in some countries.