After months of due diligence, Kia has finally announced its India plans that start with building an independent facility in Andhra Pradesh, India which will be operational by the end of 2019. The Korean car maker will invest close to Rs 7,000 crore to build the facility with an annual production capacity of 3 lakh units. Kia has also announced two cars slated for production in the new facility, a compact sedan and a compact SUV, which fit perfectly into the changing scenario of the car market in India.
Looking at Kia’s global product portfolio there are only two contender platforms that can spawn the compacts – the Kia Picanto or the Kia Rio. With GST coming in later this year, there is a high chance that the duty sops prescribed for sub four metre cars will no longer exist. In that case, Kia has the option of building a sedan and an SUV on either of the platforms.
Hyundai is doing better than Maruti in the premium compact SUV segment, particularly in the case of the Creta, which is based on the Elite i20 platform, which is also the platform the Kia Rio is based on. If Kia decides to build the two cars on this platform, it would help them get into the margin game straight away. But then, with Hyundai already wanting to play the premium game, it is natural that Kia, Hyundai’s sister concern, will want to take on Maruti Suzuki in the numbers game.
We know that Kia will be positioned below Hyundai as a brand which makes the Kia Picanto platform the clear favourite. Kia is expected to go into production by the end of 2019, the same time when the new Grand i10 platform is expected. We also know that the global Picanto-Grand i10 platform has been tweaked for the Indian cars and we can expect the same for the new global platform.
The B+ segment is expected to be the volume generator by 2019 and the Picanto-based compact sedan and compact SUV will perfectly fit the bill. Which means we can expect it to be a competitor to Maruti Suzuki Dzire, a compact sedan that will sit marginally below the Hyundai Xcent, and priced close to the Tata Tigor. As for the compact SUV, you can expect the much awaited rival to Maruti Suzuki Vitara Brezza to emerge from the Hyundai fold in form of a Kia if the Korean car maker does not build one with a Hyundai badge before 2019.
