Kia Compact Sedan And Compact SUV India Launch In 2019

Kia Motors, a subsidiary of Hyundai Motor Group, has announced its intent to set up a manufacturing plant in India. It has signed a Memorandum of Understanding with the Government of Andhra Pradesh to build a facility in the south-west district of Anantapur.

Kia has stated that it is going to develop "a strategic compact sedan and compact SUV" specifically for the Indian market. We understand that both the companies will function as separate entities in the country - which could lead to competing products. 

In international markets, Kia is known for its affordable cars which are targeted towards the younger crowd - it could continue the trend in India too. From what we gather, the 'strategic compact sedan' could be a rival to the Hyundai Xcent, while the 'compact SUV' could be a rival to the Hyundai Creta. 

While some product overlap is inevitable, both companies are expected to position their products differently. Hyundai has been pricing its products at a premium in their respective segments - that may amplify once Kia comes in. Kia, on the other hand, is expected to position their cars as the more value-for-money options in the respective segments.

To be spread over an area of 536 acres, Kia's new factory in India will be constructed beginning end-2017/early-2018. Kia has claimed an investment of USD 1.1 billion (approximately Rs 7052 crore) in the plant, which will include facilities for stamping, welding, painting and final assembly. 

Kia expects the plant to be fully operational by end-2019; at its peak, the plant will be able to assemble 3 lakh units a year. The cars assembled here will be sold in India and exported too. According to the company's press release, India is set to become the third largest new car market in the world by 2020 - and it wants to cash in on that potential.