Kia's India conquest: How the Korean carmaker outpaces peers on Indian turf

(Image: Reuters)

Ever since its debut in 2019, Kia India has been on a winning streak that’s yet to be broken. From the Seltos, and the Sonet all the way to the Carens, Kia India’s carefully studied approach to tackle a highly competitive market seems to have paid off, as is evident by the sales milestones it has achieved in record time.

In October, Kia India recorded its highest monthly sales ever, with 25,857 units sold. By its third year of operation in India, Kia had already risen to become the fifth best-selling car brand in the country, behind giants like Maruti Suzuki, Hyundai, Tata and Mahindra – brands which have been around for decades.

Much like other global carmaking giants like Honda, Toyota, Nissan and Volkswagen whose two-decade-plus experience in India couldn’t beat Kia. So what did Kia do differently that made it buck the established norm, time after time?

Right segment, right time

Having learnt from the mistakes of manufacturers like Volkswagen, Toyota and Honda, Kia Motors didn’t bother to tackle the low-cost, sub-four metre car market. It immediately sought to occupy the spot that lies between affordable and aspirational. When Kia India arrived with the Seltos in 2019, its cousin, the Hyundai Creta, was overdue for a generational upgrade. This allowed the Seltos to land smack in the middle of the most competitive, and fastest-growing segment in the country.

The result? Within four months of its launch, the Seltos had sold 40,581 units with a monthly sales average exceeding 10,145 units. Having outsold competition like the Creta (momentarily, at least) and the Maruti Suzuki Brezza, the Seltos immediately established itself as a force to be reckoned with. Instead of gimmicks like internet connectivity, Seltos came in with strong fundamentals which included a turbocharged engine option, a feature-rich cabin and segment-first features like a turn-indicator camera and a Bose sound system.

Today, features like heads-up-display and ventilated seats are provided in several top-end SUVs, but the Seltos’ mix of performance and luxury, paired with sharp and contemporary styling cues really made it stand out.

The Seltos came in with an extensive list of variants covering a vast price spectrum. In short, there was a Seltos in every specification, for anyone in the market for a mid-size SUV.

In 2020, Kia sold 96,932 units of the Seltos out of 1,40,505 cumulative sales that year.  An argument can be made that the Seltos capitalised on a lull in mid-size SUVs, upon arrival. Ford and GM were on their way out, the Skoda Kushaq, VW Taigun were yet to arrive, as was an updated version of the undisputed segment leader - The Creta.

While the Seltos’ market share shrank in the subsequent months, Kia proved that it had more than one ace up its sleeve. Kia followed up the launch of the Seltos with a significantly more premium Carnival - a large, luxury MPV superseding even the mighty Innova in terms of comfort, price and luxury, thus enhancing Kia’s aspirational quality.

The Carnival, clearly not intended to be a volume hit, was then followed by another blockbuster success - the Sonet. Sitting below the Seltos, the Sonet’s success led to some level of cannibalisation, with a few Seltos customers opting for the top-end Sonet instead. However, year after year, the Seltos continue to outsell the Sonet by over 20,000 units. It remains, to date, Kia’s biggest hit.

More for less

Kia continued with the same formula with its successive launches. Offering features, space and performance at a highly competitive price, despite sharing a powertrain with Hyundai – India’s second largest carmaker – Kia managed to add more flair to whichever segment it entered,  When launched, the Kia Carens was the only car in its segment offering six airbags as standard.

The Sonet, apart from offering three powertrains, also offered a tyre pressure monitoring system, LED lights, auto headlamps, front and rear parking sensors, an optional DCT gearbox, a 10.25” touchscreen infotainment system along with an exhaustive list of features in its top-end Sonet models.

The value-for-money aspect never fails to attract customers in India. If there’s anything to be learnt from the failure of cars like the Tata Nano, the Toyota Etios or the Volkswagen Ameo – it’s that all were efforts from more premium car makers at making an affordable mass-market car. Except all of them provided less-for-less. In India, you can’t coast on brand value alone.

It’s no surprise then that the next launch – the Kia Carens – fetched 50,000 bookings in just two months. As of June 2022, The Carens had beaten the formidable Toyota Innova in the MUV segment. Granted it’s price is much lower, but as a seven-seater, the Innova had remained dominant in the market for decades.

Dethroning it was a major boost to Kia’s overall brand image as a giant slayer of sorts. There is, of course, room for improvement. Kia hasn’t quite ranked particularly high in the crash safety department, especially when compared to local players like Tata Motors and Mahindra. As of the date of publishing this article, both VW and Skoda have attained a five-star crash safety rating for the Taigun and Kushaq under Global NCAP’s more stringent #SaferCarsForIndia parameters.

Weathering the storm

I still recall taking delivery of a test unit of the Sonet, several months into the pandemic in 2020. After the buzz created by the Seltos, it was hard to envision another sales hit in the midst of a global pandemic. Not surprisingly, the Sonet did to the sub-compact SUV segment, what the Seltos did to the mid-size SUV segment, upon launch. In a little over a month of its launch, Kia had already sold 11,147 units of the Sonet.

Despite the segment it occupied, the Sonet appeared larger than life. Its enhanced musculature, backed by a very sporty engine, already heralded the arrival of a star. Taking it to the highway immediately, the Sonet proved very stable during high speeds, with a plush, well-appointed cabin. It’s no surprise then, that during a pandemic year, Kia India recorded 50% year-on-year growth by November, 2020.

Passing this litmus test, once again showed that if the product is exceptional, even the dreariest economic conditions cannot prove to be an impediment. In addition to this, Kia established an extensive network of touch points even before entering the market. Despite having been here for three years, Kia India currently has 339 touchpoints.

To put this in perspective, even Tata Motors, despite its 77-year-history, only has 630 touchpoints in India. Furthermore, within those three years, Kia has also managed to enter the premium EV space, locking horns with the likes of BMW with the launch of the EV6. Brought in as a CBU in limited numbers, Kia claims to have received over thrice as many bookings for the car whose prices start at Rs 59.5 lakh. This is despite the fact that there was a similarly priced BMW EV on offer, at the same time.

Ultimately it was Kia’s presence across multiple segments, from sub-compact SUVs to premium EVs, its extensive dealer network established in record time, a strong portfolio of petrol and diesel powertrains and its feature-rich cabin which served as the main factors behind its continued success. No carmaker, not even Hyundai has a portfolio as spread out across the premium spectrum, and that bodes well for the brand’s future.