Korean carmaker Kia Motors, not too well known in India about three years ago, has come a long way now, and is selling around 8,000 units a month on an average, thanks to its superhit Seltos SUV and multi-purpose vehicle Carnival. The company is launching compact SUV Sonet next month, for which bookings began on Thursday. The company has invested around $2 billion to set up a manufacturing facility in Andhra Pradesh, and built a supplier network, so that the vehicles manufactured here have more than 90 per cent localisation. In an exclusive virtual interview from Seoul with BusinessLine, Ho-Sung Song, President, Kia Motors, shared his views. Excerpts:
What is your secret recipe for success in India, even amid the pandemic?
We found some points and tried to implement them in our vehicles in the Indian market. For instance, the surface (exterior design) has all the elements to satisfy Indian customers. This is one of the reasons for our success. Secondly, we had internal discussions and found that some brands, when launching in a new market, need a wide sales and service network. Today we have almost 300 touchpoints in India including sales and service and this helps the customer when they choose to buy our brand. Then comes the product, which is very important. Seltos is especially designed and developed for India. Now, of course, we will use it for the world.
I think this product reflects all kinds of elements to satisfy Indian customers. We have invested almost $2 billion in an advanced high-tech manufacturing facility in Andhra Pradesh and a supply chain around that area that makes high quality products.
What will be your expansion plans going forward?
We have a total production capacity of 3 lakh cars — 2 lakh for domestic demand and 1 lakh for exports — and that will suffice. This capacity will cover another two or three years for us. But, in future, we will have to figure out how to expand the production capacity. In the long term, we want to reach beyond 3 lakh cars in the Indian market alone, and another 1 lakh or 1.5 lakh for exports. So, on the manufacturing side, we will have the flexibility. On the network side, we will have around 400 dealers as per our mid-term plan in the coming months.
How many countries do you plan to export to from India?
We have already started exports from India. Now, we aim to export the Sonet to over 70 counties including those in West Asia, Asia and South America. We will cover all the overseas markets from India for the compact SUV.
After the Sonet, what are your launch plans?
We cannot launch new vehicles every four or five months…it is impossible. But we are now seriously studying what will be our next products — not only for India, but also worldwide — and the trend is more towards SUVs. The small or medium sized SUV is getting more popular worldwide because hatchback demand is decreasing. So we will continue to study what kind of innovative products are in demand and develop them from the Indian factory.
Where do you see Kia in India, from a global perspective, in five years? Will you stick to manufacturing only SUVs or make space for hatchbacks and sedans?
Our current capacity cannot cover all the demand from India and overseas — we will have to increase it. The Indian factory right now is only for producing small and medium size SUVs. At the moment, we’re not thinking about small sized sedans in the Indian market because we have different plants around the world and each has an independent role. For instance, our Mexico facility makes only small sedans and hatchbacks. So, at the moment, we don’t have any plans to make a small hatchback in the Indian market.
Will you share your platforms with Hyundai for new launches in India?
I think all the motor groups globally share platforms for developing different types or designs of vehicles. Volkswagen is sharing a platform with Skoda and even Audi. So we are also sharing a platform with Hyundai to make efficient and effective products. Yet, the design language is totally different — different brand recognition and totally different product specifications as compared to Hyundai.
What are your plans for alternative fuel vehicles in India?
At the moment Kia is providing more opportunities to customers in petrol and diesel options. I know some of the brands in India have stopped producing diesel cars owing to new emission regulations, but we respect the choice of the customer and offer both petrol and diesel (in BS-VI). For the time being, this will continue.
Globally, the trend is towards hybrid or electric vehicles (EVs) but it depends on each country. Moving to EVs is not only the decision of the manufacturer, but also of the government and local authorities because they have to set up the infrastructure and motivate consumers to buy EVs. So my opinion about India is that it is too early for EVs — there are not enough incentives from the government. For the time being, the government focus is around two- and three-wheeled EVs.