[TusharK]

According to a media report, Kia is planning to set up a second manufacturing plant in India.



At present, Kia's only manufacturing unit in India is located at Anantapur in Andhra Pradesh. This facility has an annual production capacity of 3,00,000 units. The report states that Kia expects to reach full capacity by 2022. Kia is also rumoured to launch an MPV to rival the Ertiga in the Indian market. The carmaker could start facing capacity issues once the Sonet compact SUV and the MPV are launched. It is believed that the Sonet will be made only in India and could be exported to other countries

It has been reported that Kia has started scouting for a new site for its second plant. It is also believed that the company might be looking at sites outside Andhra Pradesh.

Kia currently has two products on sale in India. The Seltos SUV was the first model to be introduced, which was followed by the Carnival MPV. The upcoming Sonet is expected to compete with the Hyundai Venue, Tata Nexon, Ford EcoSport, Maruti Vitara Brezza and the Mahindra XUV300.

Source

Link to Team-BHP News

[CrAzY dRiVeR]

Kia has to be the best badge engineering story in India so far!

They have been able to differentiate their products well enough with Hyundai and directly overtake most other established players to become the 3rd largest brand in the market. A quick look at the numbers also shows that this success hasn't really come from Hyundai's loss either. Hyundai has always looked like the one formidable opponent against Maruti Suzuki and Hyundai-Kia certainly will keep MSIL on their toes in the coming years.

I feel that Hyundai-Kia also feels this confidence and has started bringing in more technology now - the best example being the 1.0 TGDi motor IMHO, which is available in multiple products starting with the Grand i10 Nios to Verna. They have two brands to share the numbers with, and one or the other may succeed.

PS: Not much of a doubt that Sonet will succeed and will bring even better numbers to Kia. Here at home - wife has been bugging me ever since the expo with questions on the launch! Kia (Seltos and Sonet, also very much like the original Creta or Compass when launched) does seem to appeal to the ladies.

[motorworks]

Originally Posted by CrAzY dRiVeR

Kia has to be the best badge engineering story in India so far!

While i agree with a lot of your points, the term badge engineering is not befitting of the efforts Kia has put in. When you normally state badge engineering, it infers a minimal effort wherein the car basically is the same, but has slight changes to the exterior and in many cases being built in the same manufacturing unit as well. This has been the case with many such badge engineered cars such as the Rapid and Vento, and almost all of the Nissan and Renault cars. And the most relevant example of badge engineering would be the Glanza and Baleno.

But Kia, has done things as any new manufacturer would. They set up a massive factory, they built a team from scratch, sure they share engines and platforms with Hyundai, but thats the case with half the world now. You have Toyota using a BMW for its supra, and a lot of other manufacturers use each others platforms and engines even if they are not part of the same group.

And Kia could have come in and easily launched an i20 or Grand i10 clones, but they havent done that and even if they do so in the future, Im sure they would have significant differentiators. Also, they have tried to build their own brand, by getting completely new products like the Carnival and it does look like there are going to be many more premium cars from their stable too.

[paramesh3210]

I read it somewhere that KIA was in talk with Tamilnadu government for a new plant. I don't know where exactly though.

Coming to the brand itself, it is doing fairly well and it proved it with Seltos. The line up that KIA is going to bring to India in future definitely will give competitions to many brands for sure. Having said the above, healthy competitions is always good. We as a customer will have lots of options.

[sunilch]

Originally Posted by CrAzY dRiVeR

Kia has to be the best badge engineering story in India so far!

This ain't badge engineering. Badge engineering would be something like Renault Scala/Nissan Sunny, Renault Pulse/Nissan Micra or Toyota Galanza/Suzuki Baleno.

This is more akin to what VW or GM do. They have alternate brands for you depending upon your taste and, may i say, budget (willingness to pay). The cars share the same underlying platform and core components, but otherwise they give you a different feel/experience when you drive. Something like VW and Skoda or GM and many of its sub-brands.


Moreover, Hyundai is able to garner more sales with this approach and capture aspirations of buyers who want to upgrade/differentiate themselves a bit.

[Nithesh_M]

Maharashtra is said to be the candidate

[Bibendum90949]

Does this mean that their Anantpur plant was running the 3 rd shift too ( prior to lockdown of course ). I remember reading the news about them starting the 2 nd shift when the demand for Seltos transcended their own expectations.

It's indeed a good sign that they don't intend to take the foot off the pedal despite the global economic downcast - owing to the covid outbreak and resultant lockdowns the world over.

[GTO]

Must be nice to be thinking of a 2nd plant when the rest of the industry is battling overcapacity . The IIMs should do a case study on Kia's perfect entry into India.

It's usually 10 times easier to add capacity at or around your existing plant itself. Kia might be using this as a bargaining tactic with AP. On the other hand, they could want to move to TN to be closer to Hyundai's full base, or somewhere else to spread out risk. Will be interesting news to follow.

[Vid6639]

Originally Posted by GTO

Must be nice to be thinking of a 2nd plant when the rest of the industry is battling overcapacity . The IIMs should do a case study on Kia's perfect entry into India.

It's usually 10 times easier to add capacity at or around your existing plant itself. Kia might be using this as a bargaining tactic with AP. On the other hand, they could want to move to TN to be closer to Hyundai's full base, or somewhere else to spread out risk. Will be interesting news to follow.

For exports it's easier to be in TN or MH or GJ with ports. AP means closest port is Vizag which is far off.

For nearby plants they can consider KA as well but doubt there are any talks.

The current KIA plant is almost at the KA-AP border and nearest airport is actually Bangalore. Most Kia top staff stay or roam around in Bangalore.

[ValarMorghulis]

I hope Kia setup their second factory in Karnataka near the existing factory in AP. This will help in leveraging the existing setup and provide a bargaining chip against both governments.
Also, Kia please don't make the Sonnet better than the Venue (pure jealousy of a future car )

[poised2drive]

Originally Posted by Vid6639

For exports it's easier to be in TN or MH or GJ with ports. AP means closest port is Vizag which is far off.

For nearby plants they can consider KA as well but doubt there are any talks.

No.

The nearest port to the Kia Factory @ Penukonda, Ananthpauram District is Krishnapatnam Port in Nellore District, AP which is around 350 KM east.
One of the primary reasons to establish this factory at he present location is its proximity to the Krishnapatnam Port.

And there were agreements between the Port and Kia even before the start of the production.

http://www.krishnapatnamport.com/dat...ULY%202018.pdf

The road from Penukonda to Krishnapatnam is being widened to increase and sustain the future traffic.

Also, it is reported that Kia has agreements with the Chennai Port , which is around 400 KM from .
Visakhapatnam Port , as ironical as it could be, supports the hinterland of Chattisgarh, Orissa along with only a tiny part of AP ( North Coast) given its geographical position.

[srishiva]

Karnataka should develop a industrial site near the border. If krishnapatnam port can be used for both KA and AP, it will benefit both states. They should develop infrastructure for easy transport. There are already many garment factories on border and in Hindupur. All travel happens from Bengaluru airport.

One of the reasons Chinese based companies are going to south east Asian countries are the ports and movement from ports to hinterland. Hope we do the needful. Water availability from TB dam and further south due to godavari linkage to TN should help the whole region.

[karan0009]

Solely to diversify risk, it makes sense to open up a new plant in any other state other than AP. Chennai should be the strongest contender in this case as Hyundai is also based there. One of the advantages of setting up a plant in Chennai will be vendor management as Hyundai is operating there since a long time.

[poised2drive]

Originally Posted by srishiva

Karnataka should develop a industrial site near the border. If krishnapatnam port can be used for both KA and AP, it will benefit both states.

Krshnapatnam does serve the needs of Karnataka too.
In fact, one of the major exports of the Krishnapatnam Port in the last decade was the Iron-ore.

It was mined from the Obulapuram Mines and was shipped to China , legally and illegally.

But I am afraid it would be a folly to open one more centre in the proximity to the old one - too many eggs in the same basket. Eventhough the states may differ, the geographical and demographical conditions are very similar on both the sides of the border. Any physical calamity will equally impact both the sites.

Originally Posted by karan0009

Solely to diversify risk, it makes sense to open up a new plant in any other state other than AP.

Chennai should be the strongest contender in this case as Hyundai is also based there. One of the advantages of setting up a plant in Chennai will be vendor management as Hyundai is operating there since a long time.

Agreed - Diversifying the Risk.

But Tamil Nadu will not be a wise choice as it would water down the principle of Risk Diversification.

I guess they'd opt for a location close to the West Coast - may be Maharashtra or Gujarath.

[VJ05]

Ford was selling one of it's factory late last year. Heard that Chinese players were in the race. Kia can also look to buy as it makes perfect sense to them. They would only have to customize the assembly lines, set up the supply chain and production can start. Will also require less CAPEX compared to setting up a Greenfield project.

I think Indian Car market landscape will change in the next 3-5 years. Asian Manufacturers - Koreans (Hyundai & Kia), Japanese (Suzuki along with Toyota) and Chinese (MG and others who are waiting in the wings) will dominate and Germans/Americans will exit or barely survive.