Kia – The new success story in Indian Automotive Industry

Brand Kia which was relatively unknown brand for the majority of the Indians entered Indian market in 2^nd Half of 2019. It is now one of the most popular brands in Indian Market. Within just 2 years, including the times where the whole world shook due to Covid Pandemic, how did this brand acquired so much success (Garnered around 6% market share and entered Top-4 Auto makers in terms of sales) & popularity in one of the most difficult markets on Earth?

Following are my personal observations on how did Kia cracked the success code for Indian Market

1.  The Initial Product (Kia Seltos)

-      For any brand to get success, Products are very important. There is an old saying that “There is nothing that a good product can't achieve”. Kia understood the current Trend of SUVs in Indian market and launched SUV Seltos in B-segment. Its only major competitor is 1st Gen Creta which was launched way back in 2015. Seltos came up with modern styling, premium Interiors, wide range of Engine & Transmission options and many features which are mostly limited to high-end cars (Heads up Display, 360⁰ view monitor, BOSE Sound system, Air purifier with perfume dispenser etc.)

-      Most of the Creta owners loved to put on accessories to it, these accessories like LED lamps, Bigger Touchscreen, Premium Sound system etc. come as factory fitted in Seltos. So “Seltos became a Creta which customers liked to buy” and is an instant success

-      They believed that Indian customer is much more evolved to appreciate the premium features & quality product unlike some brands which give Indian consumers the step-motherly treatment

2.  The Belief of Kia

-      We see many brands coming to India and attempting half-heartedly. If the product is good, distribution is poor. If the distribution is in place, product is bad. Assuming product & distribution are good, pricing is bad and so on.

-      Kia had believed that Seltos will become success, they had their showrooms ready in advance, they had roped in young stars for huge promotional campaigns and the product as I said before is outstanding and almost flawless. Finally, the pricing was similar to existing models like Creta. The production capacity at Andhra Pradesh plant is well in advance ramped up for the production that is needed. They were able to deliver more than 10,000 vehicles per month. We haven’t seen such a committed and well planned new Auto maker in our Industry.

 

3.  The Support of Hyundai

-      For any new brand, there are many hurdles such as R&D, Distribution network, Vendor acquisition etc. From the customer point of view, it’s not easy to get convinced to put their hard earned money on a relatively unknown/new brand.

-      But for Kia, Hyundai is like the backbone especially in the Indian market. Since Hyundai is already well established OEM in the Indian market, this helped Kia majorly in its operations and R&D. 

-      Customers know that Kia is the sister brand of Hyundai and started trusting Brand Kia

 

4.  Most of the young customers know Kia globally and they are the major target customers

-    For people who travel abroad and people who follow Tennis & Football, Kia is not an unknown brand. Kia have cashed in on those young & dynamic customers by making them the target customers for Seltos

 

5.  Kia proved it’s not a one product wonder

-  Kia hadn’t stopped with the success of Seltos, It was quick to introduce Carnival to improve its Brand image and also the <4m SUV Sonet which is again highly successful. They have plans to introduce models in other segments in the coming years. This shows their solid commitment towards Indian market

 

6.  Proper Differentiation strategy with Hyundai

-      The major hurdle for Kia is to differentiate itself from Hyundai because Seltos will pitch in against the well-established Creta. They cleverly positioned Seltos as a more youthful & premium offering compared to Creta which cater to more mature customers. Kia has cleverly added GT line to attract sportier buyers. Even it is the same case with Sonet as well where it was positioned as a premium offering compared to Hyundai Venue

-      Proper differentiation strategy with Hyundai is one of the major success reasons for Kia

Overall, we can say that Kia is here to stay in Indian market and in future we might see much more exciting products from them. The belief & proper planning showed by Kia will be the major lesson for other OEMs who are entering the Indian market. And it won’t be surprise if we see Kia India case study in B-Schools to learn.