Kia Begins Production at Its 1st Plant in India

  • By Yoon Hyung-jun

    August 09, 2019 11:04

    Kia began production at its new plant in Anantapur, India on Thursday. The plant has the capacity to produce 300,000 cars annually and is mainly dedicated to producing its Seltos small SUV, which has already received over 22,000 pre-orders ahead of its release there next week.

    After making inroads into the U.S. and China, the carmaker is aiming high in the Indian market, which is now one of its biggest production bases. With the addition of the new plant, Hyundai, which already has two factories there with a combined production capacity of 700,000 cars, and its affiliate Kia are now able to roll out about 1 million cars annually.

    Kia believes the Indian market has tremendous growth potential, given the country's low car ownership rate of just 35 per 1,000 people, compared to 450 in Korea and 820 in the U.S.

    The world's second-most populous country is projected to become the third-largest auto market next year after China and the U.S., though sales have slowed recently amid a sluggish economy.

    Hyundai sold 260,000 cars in the first half of this year there, down slightly from 275,000 last year, but its market share rose to 16.8 percent from 16 percent in the same period.

    While their rival foreign carmakers and local players downsize due to weak sales, the two Korean carmakers are boosting production, which they believe will benefit them in the long term. In particular, they hope to cash in on the growing popularity of small SUVs there.

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