Kia bets on localisation for its India drive Start-ups in top gear, focus on clean mobility
Kia Motors, the latest global automobile major to enter India, is not nervous about being a late entrant. Instead, the company is confident that the delay will help it launch models with a high level of localisation and reach the targets on volumes and market share sooner.
“We are fully aware that shipping parts from Korea will not be feasible. Our goal is to have the highest level of localisation by the time we enter the Indian market,” said Kook Hyun Shim, chief executive and managing director, Kia Motors India.
The company is looking at a market share of 5- 6 per cent initially.
Kia’s upcoming plant in Andhra Pradesh will have an annual installed capacity of 300,000 cars. The India unit will account for 10 per cent of the company’s global sales once the capacity is fully utilised, Shim said.
South Korea’s second-largest automobile maker and Hyundai’s sister company showcased a lineup of 16 models from its global portfolio at the ongoing Auto Expo. Among them, the company plans to manufacture the SP Concept at its Andhra Pradesh facility. The compact SUV will be in showrooms by the second half of 2019.
“We agree that we have entered the Indian market late. But we will use this as an opportunity to come here fully prepared,” said Shim.
To be sure, making a dent in a passenger vehicle market, which has largely been a two-horse race between Maruti Suzuki India and Hyundai Motor India, will not be easy for Kia. Among other things, the company faces the challenge of creating and building the brand.
Shim is not oblivious to the challenge. “From now till we start production, we have 16 months to build the brand and put in all our efforts,” he said. After the SP Concept, Kia will launch a small SUV and a premium hatchback in the Indian market. The company is likely to commence exports from 2022 to markets in West Asia.
While both Kia and Hyundai will be competing in the same segment with almost similar products, the companies will have synergies in logistics and supply chains. Kia is likely to tap into Hyundai’s supply chain base and logistics infrastructure.
“They have an impressive product line-up but they will have to compete at a price point that is relevant for the Indian market,” said Rakesh Batra, partner and national leader, automotive sector, EY India.
It is no more just a platform for launching vehicles and showcasing concepts. Start-ups are using the Auto Expo to attract investments as well.
Of the 12 startups participating in the expo, nine are working in the field of electric mobility. In the 2016 edition of the expo, only two start-ups had participated.
Even though a number of established automobile makers are yet to chart out a clear roadmap for electric mobility and their commercial launches, these start-ups are ready with products and solutions. Their only problem: managing the cost of the final product and commercialising them.
Beside electric vehicles, some of the start-ups are working in the area of bike customisation, motorsports, auto gaming, and autonomous vehicles. All of them are showcasing their products.
Bengaluru-based Emflux Motors launched India's first electric superbike in the 600-650cc motorcycle segment. Swedish start-up Uniti, which has tied up with Indian firm Bird Mobility, showcased a two-seater electric vehicle, which operates on a joystick — an input device that can be used for controlling the movement of the cursor or a pointer in a computer device. The company plans to launch a five-seater car by 2020, and has already started taking orders with a booking amount of ~1,000. According to Albin Wilson, art director and senior representative at Uniti, the car would cost around ~714,000 and could run for 200 km on single charge.
Manesar-based Desmoto Electricals showcased an e-rickshaw, which according to the company can run for 100 kms on an 8-hour charge.
The other start-ups participating in the expo include Aftek Motors, Cleveland, DJC, IMN Crafts, Menza Motors, Okinawa Autotech, Goldstone, Pubang Etron Electric Motor and Twenty Two Motors.
Most of these startups agree that a government policy can help make electric vehicles successful in India. TVS Motor recently acquired a 14.8 per cent stake in the Bengaluru-based electric two-wheeler and energy infrastructure startup Ultraviolette. The start-up designs and develops motorcycle and battery packs. Hero MotoCorp has invested ~2.05 billion in Ather Energy, an electric two-wheeler start-up. Ratan Tata, chairman emeritus at Tata Sons, has invested in Jayem Auto and Ampere Vehicles.