Kia targets top-5 comeback with Seltos push, plans entry into new segments

Kia will announce the price of the new Seltos on January 2.

Kia India, which was once among the top five passenger vehicle (PV) manufacturers in the domestic market, is looking to return to the top tier with the new-generation Seltos SUV and by entering additional segments based on customer requirements. The carmaker slipped out of the top-five ranking after being overtaken by Toyota Kirloskar Motor, as competition intensified across high-volume SUV and MPV categories.

In an interaction with Moneycontrol, Atul Sood, Senior Vice President and National Head, Sales and Marketing at Kia India, observed that the company's focus is on improving volumes through better products and services, rather than targeting any specific competitor.

When asked whether Kia could re-enter the top five carmakers in India, he said, "Why not? As a manufacturer, the entire objective is to give better service and better products to our customers so that we improve our volumes and work in that direction. Our aim is to do that on a regular basis, and we will continue to strive for that."

However, he underlined that the company is not framing its strategy around rivals. "We are not targeting any specific manufacturer as such. Our focus is how do we work on our strength and how do we meet customer expectations based on our strength, which is a good product, and good and advanced technology."

Top 6 PV makers in India by volume

The Seltos remains a central pillar of Kia's India operations. Launched in the calendar year 2019 (CY19), the SUV played a key role in establishing the brand in the domestic market and continues to anchor Kia's positioning. "It is a very important model for us. You can say it is our flagship model," Sood said.

He added that the latest iteration of the Seltos reflects the evolution of customer expectations in the segment over time. "We got tremendous success when we launched it in CY19, and over the years, we understood customer aspirations, which have been evolving. The new Seltos is basically a result of meeting those customer expectations. It is bolder, bigger and more progressive."

While the new Seltos was unveiled earlier this month, its price will be announced on January 2.

Despite the model's importance, Kia is not committing to any sales targets for the updated Seltos. "We are not looking at any volume target for the new Seltos right now," Sood said, pointing to the growing intensity of competition. "The number of players have gone up significantly in the mid-size SUV segment (in which the Seltos is based), and almost every manufacturer is present in it."

Apart from the Kia Seltos, the mid-size SUV segment boasts models like the Hyundai Creta, Maruti Suzuki Grand Vitara, Maruti Suzuki Victoris, Toyota Urban Cruiser Hyryder, Mahindra Thar Roxx, Tata Sierra, Tata Curvv, Honda Elevate, Skoda Kushaq, Volkswagen Taigun and MG Astor.

Sood said the segment has shown steady growth and is expected to continue expanding over the medium term. "This segment (mid-size SUV) has been growing at about 12% over the last two years, and according to the estimates that we have, the projected growth by CY30 will be approximately 10% on an annualised basis," he said. He added that customers are increasingly aspiring to move to vehicles with better technology, which Kia believes creates room for growth if products are aligned with those expectations.

Alongside its existing internal combustion engine portfolio, Kia is also preparing to introduce hybrid technology in India. Sood confirmed that work on hybrids is already underway. "Definitely, we are working on hybrids, there is no doubt about it," he said.

However, he stressed that the company's current focus is on affordability through localisation. "The only endeavour we are currently working on is to introduce the hybrid technology in India at an affordable price. For that, we are working towards localisation of the hybrid components," Sood said. While Kia has advanced hybrid systems available globally, the challenge in India, he explained, is to localise these at a competitive cost. "Our endeavour is to localise it at a competitive price so that our customers find it affordable. But definitely we will be introducing the hybrid technology in the country."

Sood also confirmed that the Seltos is part of Kia's hybrid plans. "The Seltos definitely will come in hybrid technology. It is in our scheme of things," he said. At the same time, he declined to specify whether it would be the company's first hybrid model in India. "Will it be the first one? I will not be able to confirm that because we have specific plans and we will take it as it comes. There could be some other model also, which could be in line and comes in earlier."

Kia's approach to powertrains, he said, is shaped by both regulatory requirements and government policy. "Our understanding is very clear. Basically, there is a strong alignment with the government, which is pushing for electric vehicles (EVs). So we are committed to that," he said. "But what it really boils down to is that we have to ensure that we are compliant with the Corporate Average Furl Efficiency (CAFE) regulations. There are different technologies which have different benefits. Our aim is to have a holistic approach."

On the EV front, Kia has already introduced one affordable EV in India in the form of the Carens Clavis electric MPV and is working on the next. "It is work in progress for us to look at the next EV model, which will again be a mass model," Sood said, without disclosing a launch timeline. According to our sources, this model could be the Syros electric SUV.

At present, the company offers SUVs like the Sonet, Syros and Seltos; MPVs like the Carens, Carens Clavis and Carnival; and EVs like the Carens Clavis EV, EV6 and EV9.

Kia is also studying opportunities to expand into new vehicle segments. "We definitely have plans in terms of understanding the customer requirements, and, obviously, based on the requirements, enter more segments," Sood said, adding that the company is also focussed on retaining customers by offering them opportunities to upgrade within the brand.

Sood pointed to structural changes in the PV market to explain this strategy. "The SUV and the MPV segments combined are at 65% of the market at present, with the SUV at around 55%. By the end of 2030, they should cumulatively go to about 70%," he said. According to Kia's estimates, MPVs are expected to see limited growth, while most of the expansion will come from SUVs.

On manufacturing capacity, Kia does not see an immediate need for expansion. "Our annual capacity as of now is around 4,25,000 units," Sood said.

Any decision on adding capacity, he said, will be reviewed only when required. "In line with our overall plans, we will review when it is required, and currently it is not required."