WHEN KIA MOTORS entered the Indian market last July with the Seltos sports utility vehicle, everyone thought the timing could not have been worse. The sector was suffering from an unprecedented slowdown and all the carmakers were struggling to deal with it. But Kookhyun Shim, managing director and chief executive officer of Kia Motors India, had his homework done, and the Seltos propelled Kia to the fourth spot in terms of sales, beating the likes of Toyota and Honda, in a few months. In an exclusive interview with THE WEEK, Shim talks about the success, the opportunity in the Indian market and plans for the future.
Q/ What worked for Kia in India?
A/ Because of the evolving preferences of consumers, the dynamics of the automotive market are changing rapidly. Therefore, it has become critical for any automaker to offer a variety of options along with the best of quality, safety and facility to consumers. To be successful in the Indian market, an automaker should be present across segments for customers to have multiple options. When we entered the Indian market, we conducted exhaustive market and customer research and were able to identify the unmet needs of India. By doing this we were able to plan our products and services in the country in a much better way. Our first product in India, the Seltos, has helped us in achieving the tag of the fourth largest carmaker in the country. We have received more than one lakh bookings and have delivered more than 60,000 units till date.
Q/ How did you tackle the slowdown in the sector?
A/ We are looking at the Indian market as one that is full of opportunities and one which is essential for our brand’s growth and will make us a truly global automaker. The challenges have largely been to convince and get people to trust in the Kia brand. Besides this, new environment-friendly and safety regulations are gaining traction in the country. Since we are already adhering to similar regulations in other markets we are not that worried about these.
Q/ You are planning to introduce one new model every six months.
A/ Kia has big plans for the Indian market. As we had promised earlier our aim is to launch a new product every six months. The Carnival, our latest offering, is a product above the regular MPVs (multi-purpose vehicles) available in India and caters to the need of luxury and comfort. With the Carnival, we are creating a new segment of luxury recreational vehicle.
Q/ Your sister concern Hyundai is a strong player in India. How do you handle the competition with a group company?
Kookhyun Shim
A/ Kia and Hyundai are two different entities. All Kia vehicles possess their own distinctive identities that are different from Hyundai models. This ensures that each brand’s models continue to appeal to different types of buyers. We believe that differentiated brand positioning, along with differentiated products, is the key to success.
Q/ What are the new models and innovations you are planning to introduce in India?
A/ We have already launched the Seltos and the Carnival in India, and recently unveiled our compact SUV concept Sonet at the AutoExpo. The Seltos and the Carnival address the gap in the Indian automotive industry with regards to consumer preferences. We are aiming to launch the Sonet by the second half of 2020.
Q/ How are you planning the production to meet the growing demand?
A/ We have invested more than $1.1 billion in our manufacturing plant in Anantpur in Andhra Pradesh and a total of $2 billion in supplementing infrastructure. The manufacturing facility in Anantpur has an annual production capacity of around three lakh units and we are confident of reaching 100 per cent capacity utilisation by 2021. Our initial target is to utilise the full capacity of our plant and then we will think about further expansion.
Q/ What about the expansion of dealerships?
A/ With 265 touch points, 206 sales points and 192 service centres across 160 cities in India, Kia is accessible to a majority of consumers. We are adding 50 more touch points by the end of this year.
Q/ When do you think the Indian automobile sector will bounce back?
A/ The market will pick up momentum eventually as there are now better and more advanced products in the market. Also, observing the available data, the individual car ownership in India is really low in comparison with other global markets, hence, there is a lot of potential in the Indian market. I strongly believe that as the economy revives, the customer sentiment will improve and the automotive market will also see a rise in demand.