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Kia Motors to plunge into Indian small car market, after China, US sales dip

About a dozen companies already make small hatchbacks in India where profit margins are relatively low, a key factor that led General Motors Co. to announce an exit from the market last year.

business Updated: Mar 07, 2018 16:21 IST
P R Sanjai
P R Sanjai
Bloomberg
Kia Motors,Kia Motors Corp,South Korea
While Kia is set to begin production by the middle of next year at Anantapur in southern India, more competition is coming(Reuters File)

Kia Motors Corp. will take a plunge into India’s crowded small car market.

The affiliate of South Korea’s Hyundai Motor Corp. plans to make three or more models in the compact hatchback and sport-utility vehicle segments within three years of starting production in 2019, Manohar Bhat, head, marketing and sales at Kia’s local unit said in an interview. Hatchbacks account for almost two-thirds of India’s car market, which is poised to become the world’s third largest by 2020.

About a dozen companies already make small hatchbacks in India where profit margins are relatively low, a key factor that led General Motors Co. to announce an exit from the market last year. Success in India is essential for Kia after losing ground in China due to political tensions and in the U.S. where consumers are increasingly lapping up big SUVs.

“We view India as the next untapped market with a huge potential,” Bhat said.

While Kia is set to begin production by the middle of next year at Anantapur in southern India, more competition is coming. Chinese carmaker SAIC Motor Corp. is also setting up its first car manufacturing plant in India to sell the MG brand from 2019. France’s PSA Group is also planning to produce and sell in India.

First Published: Mar 07, 2018 16:16 IST