Kia is expected to make a formal announcement about its India entry in the next 3-6 months.
The Indian compact car market is about to get even more crowded as Kia and Daihatsu are planning to make an entry in the near future, reports ET. According to the publication’s sources who are in the know, both automotive brands could set up their Indian operations in 2018-19.
Kia is Hyundai’s subsidiary whose products are usually closely related to the models from the parent company. However, Kia adopts a completely different design language and positions its products slightly higher than their respective Hyundai counterparts. The company has reportedly started holding talks with various Indian state governments to set up a manufacturing facility.
It’s likely to end up establishing its manufacturing base at Tada in Andhra Pradesh due to its proximity to Hyundai India’s Chennai plants (a lot of synergies can be had between the facilities). Kia is expected to invest close to USD 500 million (around INR 3,400 cr) to set up a plant with annual capacity of 3 lakh units. Responding to ET’s query, a Kia spokes person stated that the company is continually evaluating potential locations for overseas manufacturing facilities, including India, to fuel further growth.
Meanwhile, Daihatsu, a low-cost subsidiary of Toyota, is currently conducting market study and is discussing with Indian vendors to understand the cost structure in the local market. Unlike Kia which can’t use Hyundai’s existing twin plants (already running near full capacity), Daihatsu can make use of Toyota’s facilities at Bidadi, near Bangalore.