"New Export Hub for Emerging Markets"… Kia Motors Expands Location of India Plant

310,000 Units Expected to be Produced at India Factory in 2023
Over One-Third, 110,000 Units, to be Exported to Emerging Markets like Mexico and the Middle East

Kia Motors India Plant Body (Photo by Kia Motors)

[Asia Economy Reporter Kim Ji-hee] Kia Motors is expanding India's position as an export hub for emerging markets. In three years, the plan is to export 110,000 units from the Indian plant, which has an annual capacity of 300,000 units, to Mexico, the Middle East, and North Africa.

According to Kia's IR report on the 27th, Kia plans to produce 311,000 vehicles at its Anantapur plant in India in 2023. Of these, more than one-third, or 110,000 units, will be sent to emerging countries. The Kia plant in India, which began operations in August last year, has an annual production capacity of 300,000 units, and the goal is to increase the operating rate over the next three years to boost exports.

Vehicles produced at the Indian plant are mainly exported to emerging markets such as Mexico, the Middle East and North Africa (MENA), Latin America, and the Asia-Pacific region. Of the 39,000 units produced for export out of the total 177,000 units produced at the Indian plant this year, a significant number were shipped to Mexico (14,000 units) and the MENA region (13,000 units).

If export volume expands to 110,000 units, the Indian plant will become a key base for targeting emerging markets. Currently, Kia produces about 300,000 units annually at domestic plants, which accounts for more than half of the vehicles exported to emerging countries. In addition, the export volumes from plants in Slovakia and China are very small, and although the Mexico plant also handles emerging market volumes, most of the sales occur locally in Latin America. When adding the domestic sales volume in India to the export volume from the Indian plant, the scale matches that of the domestic plants exporting to emerging markets.

Kia Motors India Plant (Photo by Kia Motors)

Following recent trends, India has ample potential to surpass China within a few years and rapidly emerge as Kia's third-largest production base. From the beginning of this year through September, Kia's production volume in China was 171,045 units, ahead of India's 110,538 units. However, in China, production and sales have been declining for several years due to the slump triggered by the deployment of the Terminal High Altitude Area Defense (THAAD) system.

Kia, which made its first entry into India last year with the start of plant operations, has quickly settled into the market and is showing results. In the fourth quarter of last year, Kia recorded a 1.5% market share in India with the single model Seltos, and this year it has maintained a market share in the 5% range. Kia expects to achieve a 6% market share in the fourth quarter of this year, as the locally strategic model Sonet joined the lineup in September, adding to the steady popularity of the Seltos. Earlier, Kia announced plans to introduce a new model every six months over the next three years upon entering the Indian market.

Accordingly, the new car lineup to follow the Seltos and Sonet has also become visible. Kia plans to unveil a new local strategic MPV model (project name KY) next year and launch it in the Indian market in January 2022.

An industry official said, "India is not only a huge market in itself but also a key part of the southern strategy to expand influence into Southeast Asia. Although emerging markets have shown somewhat slow recovery from the COVID-19 pandemic recently, the growth potential is very large, and the importance of India as a production base within Kia will increase further."

This content was produced with the assistance of AI translation services.