Kia Motors To Enter India In 2019; Will Set Up Plant In Andhra Pradesh

Compact sedan, Compact SUV for India under development. Sales operations to begin towards the end of 2019.  

(In Picture: Kia Picanto GT Line)

Putting rest to all the speculations, Kia Motors Corporation, has officially announced that it will enter the Indian market in 2019. The South Korean automaker has signed a memorandum of understanding (MOU) with the Government of Andhra Pradesh to build a new manufacturing plant in Anantapur district.

Highlights 

• Kia Motors will invest US$1.1 billion (approximately over Rs 7,000 Crore) for setting up its manufacturing facility in AP  
• Construction of its Anantapur-based facility to commence at the end of 2017 and is expected to begin production in the second half of 2019 
• Footprint of the new facility: 23 million sq feet (2.16 sq km/536 acres) 
• Kia will initially come up with a compact sedan and a compact SUV 
• If all goes right, sales of its cars will begin towards the end of 2019
• The manufacturing facility will produce up to 3,00,000 units annually
• Hyundai Motor Company (HMC) is the parent company of Kia Motors Corporation, both are leading South Korean automakers 

Background

Kia Motors was founded in 1944 and is the oldest automaker of Korea. It produced its first small car in 1974. It is not a sub-brand of Hyundai like Lexus is to Toyota or Acura is to Honda. In fact, Hyundai is the parent company of Kia, like Tata is to Land Rover and Jaguar. Hyundai won majority shares of Kia in an auction in 1998, when the latter was declared bankrupt in the 1997 Asian financial crisis. Ford was also keen to buy Kia, but eventually, Hyundai won the auction. This was the same time when Daewoo, which used to sell the Matiz and Cielo/Nexia in India, was sold to General Motors. 

Kia flourished under the reign of Hyundai and is currently South Korea’s second largest automaker after the latter. Both the companies are knocking out really aggressive looking and well-packaged products of late. Former Audi man, Peter Schreyer, who joined Kia almost a decade ago as a chief design officer is partly responsible for this. To put things into perspective, the new Hyundai Tucson was designed by Peter Schreyer. 

Like the current trend in the auto space, Hyundai and Kia share a lot of components, platforms and powertrain options and both manufacturers will continue to do so with their Indian operations as well.  

Products 

(In Picture: Kia Picanto GT Line)

In its official release, Kia highlighted that it will come with a compact sedan and a compact SUV made for the Indian market. The former is expected to be related to the Grand i10-based compact sedan, the Xcent. Expect similar powertrain options as well. Further, the Grand i10 shares its platform with Kia’s entry level hatch, the Picanto. So the Picanto could be offered in the country as well since its platform has already been localised with the Grand i10. 

(In Picture: Hyundai Carlino Concept)

Speaking of the compact SUV, it remains to be seen whether the new product will fall in the sub-4m category or will go up against the Renault Duster and the Hyundai Creta. In international markets, Kia offers the Soul SUV, on which the Creta is based, with near identical pricing. Hence, we believe that it will be a sub-4m SUV likely to be based on the Hyundai Carlino concept showcased at the Auto Expo 2016. Hyundai is also coming up with a sub-4m SUV based on the same concept. 

(In Picture: Hyundai Carlino Concept)

(In Picture: Kia Rio)

Besides these two products, expect Kia to bring the Optima (Toyota Camry/ Honda Accord rival), Soul, Sportage (Hyundai Tucson rival) and Rio (Maruti Suzuki Baleno/Hyundai Elite i20 rival) among others at a later date. Stay tuned to CarDekho for more updates on Kia Motors  

(In Picture: Kia Sportage)

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