Kia Motors Corporation, the South Korean automobile manufacturing giant, has become third largest automobile passenger vehicle maker in the country, with the sale of 15,664 units February. Now the company trails behind only two major automobile manufacturers- Maruti Suzuki and Hyundai Motors- in terms of total sales in India.
The flagship product of the company- Kia Seltos- performed exceedingly well in the country and sold 14,024 in February while the newly launched Carnival MPV- priced at 24.95 lakhs- sold 1,620 units.
“Our latest offering, the Carnival has been received well and this has added to our sales numbers. This not only testifies the quality, reliability and design prowess of our vehicles, but also gives a hint that India is evolving and Indian customers don’t just settle but opt for better product offerings,” Kookhyun Shim, Managing Director and Chief Executive Officer, Kia Motors India, said.
While Kia registered positive growth in total sales compared to last month, the other major players including Maruti Suzuki and Hyundai Motors posted negative growth in sales.
Kia Motors is making a big investment in India. The Anantapur plant of the company in Andhra Pradesh has an annual capacity of 3 lakh units and employs 12,000 people through direct and indirect jobs. The plant was completed in December last year with an investment worth 1.1 billion dollars.
The sale of Kia’s models increased exponentially in the last few months, and the company performed well despite a severe slowdown in the automobile sector in 2019. KIA has long term commitment to India, therefore, the company decided to set up the plant and manufacture locally.
Kia is a second-largest automobile manufacturer in South Korea after Hyundai motors which owns 33.88 per cent shares in KIA motors, too. In the last few months, especially since the Automobile slowdown, KIA and Hyundai have performed better than India’s dominant automobile player- Maruti Suzuki.
Kia was willing to carry out “further expansion” once it started to utilize the full capacity of the Andhra Plant. The previous Chandrababu Naidu government offered various incentives to KIA to establish the manufacturing plant, but, since the Reddy government came to power, the Kia project, like all other projects started by the previous government, fell into trouble.
The South Korean automobile major is mulling over the idea to shift its Andhra Pradesh plant to Tamil Nadu given its unresolved issues with the new policies of the Jagan government, reported Reuters.
In the last few years, the sale of passenger vehicles has gone down as aspirational value for cars, especially entry-level hatchbacks, has diminished over the past few years. But buyers are keen to make premium hatchbacks or compact SUVs like Hector, Seltos and Harrier as their first buy.
Last year, within three weeks of Kia Seltos’s launch, around 23 thousand people had booked the car and it became one of the top-selling SUV’s of the year. Kia Seltos, MG Hector and Tata Harrier have superseded the sales estimates of nearly all self-proclaimed economist pundits who have seemed to somehow overlook this fact. These three vehicles are mid-size SUVs and the demand and excitement for them is something that has given joy to the car-makers.
The huge demand for Hector tells us something about the consumer sentiment and market condition in India. Despite the sluggish consumption trend, the customers are not hesitating to buy a product if they love it. This means, the middle class in the country possess the ‘purchasing power’, but is not willing to spend unless they get a good product.