Kia Motors India to focus on select segments like SUVs, vans

Korea-based Kia Motors Corporation is looking to focus only on select segments such as SUVs and vans to build its product portfolio in India where 50 percent of the car market is controlled by only one company Maruti Suzuki.

A top Kia official said that the company would rather be a niche player in India rather than stretch itself thin. Each segment represents a different target customer with specific needs and expectations, he said.

General Motors, Ford, Honda, Volkswagen, Nissan and Toyota have had little or no success by being present in every segment.

Responding to questions from Moneycontrol, Lorenz Glaab, VP and Head of Global Product Management, Kia Motors, said: “We don’t intend to be in all segments and body types. It will be a niche approach for us as far as India is concerned”.

He was talking to the media through a video call.

SUVs are the way to go
Glaab added that India is following the global consumer preference to SUVs and similar body styles and Kia would follow that trend. This would mean that the Indian market won’t see Kia entering the sedan segment anytime soon.

To be sure, total sales of sedans fell 37 percent in FY20 to 3.83 lakh as from 6.05 lakh in FY19. The fall was much higher than the decline in the overall sales of passenger vehicles in FY20 in India – an 18 percent drop to 2.77 million.

Utility Vehicles, of which SUV is a part, grew by 0.48 percent in FY20 to 9.46 lakh units.

Kia Motors, which debuted in India in August 2019, has launched two products so far – Seltos and Carnival – both belonging to the SUV and the van-body type. Seltos sold 97,745 units since the debut, and Carnival 3,614 units till July-end.

Its third product, Sonet, a sub-four metre vehicle, is an SUV and is due to go on sale in a few weeks.

One new product every 6-9 months
Kia has committed to launching one new product every 6-9 months, and despite the COVID-19 disruption, the company’s plans are largely on track, said Glaab. Its next product for India will debut in the first half of 2021, though Glaab declined to reveal details of the body type.

“We are looking at a variety of angles, the size of the market, number of players and the competition. Based on this, we decide to enter specific segments. We have promised to launch one new product every 6-9 months but this cannot go on eternally. Since we have decided not to go after every segment, our offerings will be limited,” he said.

ElectrificationKia’s sister concern, Hyundai, grabbed eyeballs when it became the first company to launch an electric SUV in India. The Hyundai Kona secured buyers despite its steep price tag of Rs 23 lakh. Hyundai is now aiming for a sub-Rs 10 lakh electric car.

Glaab said that it was easy for Kia to switch to electric cars since its manufacturing set up in Andhra Pradesh is designed to handle the production of electric cars. He, however, could not provide a timeline for entering the electric vehicle (EV) segment.

“There are many parameters which come into play when entering the EV segment such as supply chain, manufacturing capability, and market demand. We can be ready fairly quickly as our plant is capable of manufacturing EVs. Besides, we will see acceleration of electrification in India,” added Glaab.

Priced at Rs 17 lakh, the electric version of the Tata Nexon saw 1,000 vehicles being sold since its launch in March. The regular Nexon competes directly with Kia's upcoming Sonet. Glaab ruled out converting the Sonet into an electric car for the time being.