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.

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

While Kia is set to begin production by the middle of next year at Anantapur in southern India, more competition is coming (Reuters File)

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.