Kia Plans to Invest $2 b Here to Build Plant, Supplier Base
Hyundai affiliate expects to create 3,000-4,000 jobs in 5 years; AP plant to become operational in ’19 as co aims to be among top 5 by ’22
timesinternet.in New Delhi: Kia Motors plans to invest $2 billion ( ₹ 12,750 crore) in India over the next two years to set up a manufacturing plant and develop a supplier base, a top executive said. The affiliate of South Korea’s Hyundai Motor expects its investment to create 3,000-4,000 jobs here in the next five years.
Kia in April announced that it would invest $1.1billion to build a factory in Andhra Pradesh’s Anantapur district. The additional investment will be to create the supplier base, said Tae-Hyun Oh, the chief operating officer of its international business division. Kia’s marketing budget will be outside of this, he told ET.
Kia’s plant is set to become operational in 2019. The company is aiming to be among the top 5 carmakers in the country by 2022. By that time, it is targeting to sell 3 lakh units a year, which will also be the plant’s optimal capacity.
Kia, which has operations in 180 nations, was absent from just two important markets until recently — Mexico and India. It started operations in the North American country last year and is now all set to roll out its first product from India in the second half of 2019.
India is a key market for global automobile companies, as it is among a few that are still growing at a fast clip. Though only a handful of the nearly two dozen car manufacturers operating in India have achieved meaningful success, Hyundai has seen strong growth from the time it entered India. The performance of the group company has encouraged Kia to target large volumes here.
“India is very important for us to achieve our target of 4 million total sales globally by 2020,” Oh said.
In 2016, Kia sold about 3 million vehicles globally. During Oh’s tenure, Kia has seen tremendous growth. Global sales expanded more than 65% and the brand value nearly tripled to $4.7 billion since he assumed his current position in 2010.
The carmaker will bring at least three models by 2022 in India, starting with a mid-size SUV. “We will produce at least three models and more in three years after starting operation. The first model would be a mid-SUV to take on the likes of Hyundai Creta,” the executive said. The subsequent product line-up will be a combination of sedans, hatchbacks and SUVs, he added.
The company plans to extensively use locally-sourced parts in the first midSUV, which it hopes will reduce costs. “The product will be made in India and made for India,” Oh said.
Kia aims to have dealerships across India’s big cities by end-2019 and touchpoints in at least 100 places by 2022. Kia has already started a dealer roadshow and the selection process will end in September. “Our main challenge would be (brand) awareness; so our first focus would be towards marketing,” Oh said.
The company has starting hiring for marketing and other important roles in India. Kia is one of the leading sponsors of sports events and would look for a similar opportunity in India. He said in India the company would adopt the same strategy that helped it grow quickly as a global brand. The pillars for success, Oh said, were a good product in terms of design and style; quality product; marketing communication; and a strong dealer network. “We survived all the ups and downs because we are strong on basics,” he added.
The carmaker is going to mainly target young professionals and wants to establish itself as a stylish and smart brand.