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Kia Motors to produce 300K cars a year in its India factory

Kia Motors to produce 300K cars a year in its India factory

Posted December. 06, 2019 07:42,   

Updated December. 06, 2019 07:42


Kia Motors is gearing up to take over the Indian market with its newly built factory that can produce up to 300,000 units a year. The South Korean automaker is also planning to launch new car models tailored for the world’s fourth largest auto market. It is expected that it will help make up for the slow growth of Hyundai Motor Group in China by growing sales in India.

The car manufacturer announced its plan to release a premium MPV and a small SUV next year at a completion ceremony on Thursday, which was held at its new factory in Anantapur, Andhra Pradesh, India. The premium MPV, which will be premiered at Auto Expo in Delhi next February, specifically targets India’s high-income people whereas the small SUV is designed for emerging markets including Asia and the Middle East as well as India. The Seltos, the first car that was released from Kia’s plant in India in July, sold 40,649 units until last month. In November, it sold 14,005 units, recording the fourth largest sales as a single model in India.

Kia Motors started building the plant in October 2017 and started the operation July this year with the Seltos. India is an automobile superpower with the world’s fifth largest car production and fourth annual sales following China, the United States and Japan. It has a population of 1.3 billion, but only 30 cars are sold per 1,000 consumers. The numbers are 141 and 387 in Beijing and Washington, respectively. New Delhi has recently seen a great increase in car sales, and it is expected to surpass Japan by 2030, becoming the third largest market.

“We needed a local factory as imports are subject to 60 percent tariffs in India, making the prices less competitive,” said a source from the automaker.

Meanwhile, Hyundai Motor Company made the entry into the Indian market back in 1996. It has two factories in Chennai, India with a combined annual production capacity of 680,000, which it plans to increase to 750,000 by next year. When adding Kia’s production capacity of 300,000 units a year, the two South Korean automakers will likely produce 1 million units a year in India, more cars than in China.

“Hyundai exports 40 percent of the cars manufactured in India, and Kia will also export some of its production to Africa, the Middle East, Asia-Pacific and the Central and South America,” a source from Hyundai Motor Group said. “India will be a bridge that links Hyundai Motor Group and foreign markets.”