Having broken into the top five carmakers in the country in just three years, South Korean carmaker Kia is now looking to make its mark in the electric vehicle space by rolling out a small SUV EV for emerging market from India.
The development work for a small SUV codenamed AY has kicked off and it is expected to hit the roads in 2025, multiple people aware of the development told ET.
The proposed SUV is based on a flexible platform, allowing Kia to launch a mass market entry level petrol SUV besides the EV, they said.
While the development work accelerates, the maker of Seltos and Sonet will make its entry into the EV space in 2022 itself by driving in its globally successful EV6 to India. The vehicle won the car of the year award in 2022.
The idea is to seed the EV market with an assembled premium product, use the next few years to build the requisite infrastructure, and then launch a mainstream EV by 2025. This would ensure that Kia caters to both ends of the market.
The country’s top carmaker Maruti Suzuki and Toyota, too, are set to enter the cleaner vehicle space around the same year
The EV market in the country is currently dominated by homegrown player Tata Motors with close to 90% market share.
By the time Kia enters the mainstream EV space, Indian carmakers Tata Motors and Mahindra & Mahindra would have rolled out about a dozen EV models between them.
An email sent to Kia India did not elicit any response as of press time on Monday.
Kia CEO Ho Sung Song had last month shared the company’s EV roadmap, wherein it has targeted annual sales of 4 million vehicles by 2030 with 50% of it coming from electrified powertrain and pure electric vehicles accounting for 30%.
Globally, it plans to launch 14 electric vehicles till 2030. This year, the company has approved an A+ segment EV or entry SUV EV for emerging markets from India, an EV pick-up truck, and another model for the developed markets.
India was amongst the fastest growing markets for Kia in 2021 and the local base is expected to continue to outpace the global growth, accounting for almost 10% of Kia’s global production and almost 8% of its total revenues.
Of the total production of 300,000-350,000 units planned for 2022 from India, the company will be exporting about 80,000 units, as per its global presentation.
Kia currently exports to more than 90 countries. With the addition of Carens MPV, India is set to be a much bigger global hub for the South Korean carmaker.
Kia’s Indian business has turned profitable in its third year of operations – a feat not yet achieved by most incumbents with higher market share – proving that carmakers can make profits in India if they get their strategy right.
The company turned profitable within two years of starting sales here and delivered a profit after tax of Rs 1,111 crore in FY21. With increased volumes in both domestic and exports markets, the profit is set to increase.
Despite it being a Covid-hit year, Kia’s total turnover grew 87% to Rs 20,290 crore in FY21. This is equivalent to 10% of the total estimated passenger car industry revenue last year. The firm’s volume sales grew 90% year on year to 196,000 units in FY21.
Interestingly, Kia India has not only been quickest in terms of volumes growth, but also in terms of revenue and profitability.
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The Indian OEMs had clocked 14.45% market share in FY19. It dropped to 11.8% in FY20 and rose to 14% in FY21. In the just concluded FY22 the market share of Mahindra & Mahindra, Tata Motors jumped to about 19.5%. However, it is way behind the 24% of FY12.
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