Kia, Daihatsu expected to enter India by 2019

Link to discussion on Daihatsu in India

The car market in India is in expansion mode, both in terms of cars sold and brands available. The majority of new car sales are driven in by entry-level and low-cost vehicles with manufacturers designing such models with the Indian buyer in mind. Now, it looks like Hyundai's sister concern Kia and Toyota's subsidiary Daihatsu are plotting a foray into the Indian car market.

According to the report by ET Auto, both companies could start introducing their products in 2018-19. Rumours of Kia entering the Indian market have been afloat for over six years now, but it is believed that the Korean automaker will announce its plans for India in the next 3-6 months. Kia is said to be in talks with several state governments to set up a manufacturing plant, with Sri City in Andhra Pradesh expected to be the location chosen. The Picanto hatchback (which was spotted testing in India on many occasions), may be launched in India along with the Sportage crossover.

Daihatsu's plans for India may be finalized by the year end. Toyota will be looking at Daihatsu to improve its foothold in the small car market. While models like the Fortuner and Innova are popular, entry-level cars like the Etios and Liva haven't been able to look eye to eye with the competition. 

Toyota currently holds a majority stake (51.2%) in Daihatsu and is expected to make it a wholly-owned subsidiary by August, 2016. The purpose of the agreement is to develop a unified strategy for the small car segment, under which both companies will be free to focus on their core competencies. This same strategy is likely to see Daihatsu deal with competitive entry-level and low-cost segments, with Toyota targeting the premium space. While Kia is expected to setup a separate plant, Daihatsu cars could be made in Toyota's plant in Bidadi, Karnataka.

With the introduction of affiliate brands, both Hyundai and Toyota will be looking at an image shift. Hyundai, which holds a 34% stake in Kia, has already confirmed that it will focus on premium cars over the next 3 years, while Toyota will be hoping that Daihatsu makes up for its shortcomings in competitive entry-level segments.