In a bid to foster sales there, Kia Motors, South Korea’s No. 2 automaker, recently shared plans to invest 1.2 trillion won ($1.1 billion) in India to build a factory that will produce localized SUVs during last month’s conference call.
“India is a new cash cow for automakers. Compact SUVs are currently best-sellers there due to affordable pricing. As the country’s economy continues to grow, demand for vehicles on the higher end is expected to see a boost,” said Kim Pil-soo, a professor of automotive engineering at Daelim University.
Hyundai Motor, South Korea’s biggest automaker, sold 44,758 units in India last month, up 5.7 percent on-year, the company said.
Sales of the Creta, Hyundai’s best-selling compact car in India, reached 10,001 units in March this year, the company said.
“Compact hatchbacks, the Grand i10, the Elite i20, and the Creta are top-selling models in India. They come with an affordable price tag, and they have been localized to suit drivers there,” said the spokesperson of Hyundai Motor.
A strong air conditioner for India’s hot weather and a spacious interior for turbaned Indian drivers are some of the company’s success factors, he added.
Indian consumers are offered unique options to cut down on price, such as a single wiper and a single side mirror on the right side.
Hyundai Motor ranked No. 2 in India by sales in 2016, according to India’s leading automotive magazine Autocar Professional. It sold 509,705 units there with 16.73 percent market shares.
In the world’s country of some 1.2 billion people, some 547 million are expected to be middle class by 2025, accounting for 37 percent of the total population, compared to the current 160 million, according to India’s economic policy research institute.
Only 32 in 1000 people own a car, which makes India a strong potential market for automakers, according to Indian Industries Association.
SsangYong Motor, the local unit of India’s Mahindra & Mahindra, also plans to share the Tivoli with Mahindra & Mahindra Group for the Indian carmaker to make a localized compact SUV, the company said.
SsangYong Motor triggered the small SUV boom here with the release of its flagship model Tivoli in 2015.
India-based news outlet Economic Times cited that investments worth up to $10 billion are projected to flow into India from global automakers for factory expansion by 2018.
Maruti Suzuki India, the No.1 best-selling automaker in India, will invest $290 million to build a R&D center in northern India’s Haryana city and spend $78 million to build its third plant by 2020 in Gujarat city, western India, the company said.
SAIC Motor, a Chinese state-owned automotive company, established MG Motor India to capitalized on India’s ever-growing auto market, and plans to launch its first model there in early 2019.
By Kim Bo-gyung (firstname.lastname@example.org)