KIA: THE RISING GIANT

 

We all remember 2019 for something special. It might be a promotion, a vacation, or simply the happening year before the pandemic took all the fun away. But, for a car afficionado like me, 2019 was the year we saw a new rising power enter the Indian auto sector, soon to take over the current power. Yes, I am talking about KIA motors, the flagship company of Hyundai motors. Who knew that one day a car company would emerge into the Indian auto sector and disrupt the SUV and Mid-SUV game? One might have thought that like Ford, GM, Datsun, Chevrolet, KIA, would also enter the market and later, the management would realize their mistake and would eventually have to leave the country with huge losses. But who knew that KEI motors had planned something different, and they were here to stay? This is the story of KIA motor, a car company that dared to enter the Indian auto sector with courage and went on to create history. 

KIA motors are a South Korea-based car manufacturer. It has been a famous brand in Seoul and has been manufacturing cars since 1944. It's a household name in the Korean market. KIA entered Indian markets with KIA Seltos. In the same year, KIA sold 112350 cars out of which, more than 50000 were KIA seltos. The tax laws for cars in India are very high. Car manufacturers are bestowed with a hell lot of rules. Things like, for SUVs, the engine power should not exceed a certain number, or it would lead to an increase in taxes. The length also matters. More than 400 centimeters are taxed differently than one falling under the category. This is the reason why most of the cars produced by Maruti are under 400 centimeters in length. This reduces the taxes which further decreases the price as well. These are small examples, but you get the point. None of the cars manufactured by KIA fall under the length of 400 Cm, neither do they have an engine that complies with the norms as well. It was a brave move by KIA motors to launch a car that does not comply with the norms written by the CMVR-TSC. The following year, KIA sold 140505 units out of which, 96932 were Seltos. KIA is a feature intense car. They have turbo chargers, powerful engines, automatic head lamps, a feature rich cabin, etc. The company has launched an extensive list of variants with vast price segments. The company had predicted beforehand that the disposable income of Indians is going to rise, and they would require a car accordingly. The following year, the company launched KIA Carnival. Carnival was not volume hit. There were few buyers for that car. Later, the company launched the Sonet. This was a big hit. KIA company knows one thing very well; 'value for money aspect never fails to attract customers in India'. What Tata Nano, Toyota Etios and VW Ameo did was they tried providing a premium car by making it affordable to mass market. But they ended up paying less for less. 

KIA later launched the KIA Carnes. It was a homerun for the company. The company recorded booking of more than 50000 units in just 2 months. The car has beaten Innova in the MUV segment, granted its price is lower but Innova dominates the market. One thing which I really admire about the management is the way they introduced the models. Unlike Ford or GM, KIAs approach was more like 1 car at a time. As my mentor, Mr. Charlie Munger says," a fool makes a mistake and then learns a lesson whereas a smart guy learns from mistakes made by other fool'. Sonet did to SUV segment what Seltos did to mid SUV segment. I was not at all surprised to see that KIA recorded 50% growth during the Pandemic. This shows that the product was exceptional, as even the pandemic could not stop the demand. Despite having a presence in the Indian markets for a mere 3 years, KIA has developed a strong touch point figure of 339. Just for the sake of comparison, Tata Motors has been in business for 77 years and they have around 630 touchpoints all over India. 

KIA has also entered the premium EV segment. They launched the KIA EV6 which hit the road for Rs 60lakh. Surely this car is not manufactured for the middle class. The company, over the years, developed a strong presence across multiple segments, ranging from the sub-SUV to Premium EV segment. They have an extensive dealer network established in record time, a strong portfolio of both petrol and diesel cars and a feature rich cabin. I think this is the strength which KIA poses. As usual, every coin has 2 sides. Similarly, KIA faces problems related to safety standards. They don't manufacture the safest car yet, but we would definitely track their progress. Also, KIA is a Korean brand and India is moving towards Atmanirbharta. If given a choice between A Tata car and KIA, the sentiment goes towards Tata, unless you are a BTS fan or follow the Korean culture. KIA has to travel a long distance to enter our hearts and not just our pockets. Maruti is losing their market share. The increase in disposable income of Indians also means that we are leaning towards splurging more Rupee, when it comes to buying a car. The journey ahead might be uncomfortable for the rising power as well as the existing one, but I can guarantee that it would be worth watching. Take something to munch, a chair to lean and just watch the show.