Hyundai, Kia post record sales in India; to build IONIQ 5 locally

South Korea’s two leading automakers – Hyundai Motor Co. and Kia Corp. – are solidifying their presence in India, a fast-growing Asian market that has for decades been dominated by Japan’s Suzuki Motor Corp.

According to the Society of Indian Automobile Manufacturers (SIAM), the two automaking units of Hyundai Motor Group last year sold a combined 807,067 vehicles in India, the world’s third-largest car market after China and the US.

The sales represent the Korean automotive group’s best performance in India since Hyundai Motor established its car manufacturing plant in Chennai in 1998.

SIAM data showed Japan’s Suzuki Motor, which runs Maruti Suzuki India Ltd., its joint venture with Indian carmaker Maruti, ranked top with sales of 1.58 million cars in 2022.

The Korean duo came in second, followed by India’s Tata Motors (526,821 cars), Mahindra & Mahindra (332,872 units) and Japan’s Toyota Motor (159,801 cars).

HYUNDAI, KIA STRENGTHEN SUV LINEUP

While Suzuki has focused on compact sedans in India, Hyundai Motor and Kia have steadily strengthened their sport utility vehicle lineups to attract Indian drivers who favor tall vehicle bodies due to the often subpar road conditions.

In 2020, Hyundai and Kia emerged as preferred SUV brands in India with one in every two SUVs sold made by the Korean duo.

Last year, Hyundai Motor’s mid-size SUV Creta was the top-selling SUV and the seventh-highest seller among all vehicles in India. Hyundai’s small-size Venue SUV is also gaining popularity in the country.

Kia, which entered the Indian market in August 2019, is selling premium SUVs, including the Seltos and the compact Sonet, in the Asian country.

Maruti Suzuki’s market share in India was 51.4% in 2018 but steadily fell to 41.3% at the end of 2022. By contrast, Hyundai and Kia’s combined market share increased to 21.1% from 16.3% over the same period.

In May 2022, Maruti Suzuki yielded its market leadership to the two Korean carmakers on a monthly basis.

In the Indian market, Suzuki finds itself caught between the Korean automakers winning over consumers seeking high-end models and local players pushing sales of budget vehicles.

Tata Motors is rapidly catching up to the Korean carmakers with its market share rising to 13.8% at the end of 2022 from 6.4% at end-2018.

Analysts said India will emerge as one of Hyundai Motor Group’s core markets given the country’s low automobile penetration rates despite its huge population of 1.4 billion people.

New car sales in India stood at 4.25 million units last year, but are forecast to grow more than 10% this year, above the estimated global market growth rate of 4.8%.

According to market research firm Bain & Company, annual new car sales in India are projected to reach 13 million units, close to car sales in the US market.

TO LOCALLY PRODUCE ALL-ELECTRIC IONIQ 5

In line with the Indian automobile industry’s push toward a greener future, Hyundai Motor plans to manufacture its latest all-electric IONIQ 5 crossover at its Chennai plant.

Hyundai has been investing about 1 trillion won ($804 million) since 2019 to build an EV production facility at the Chennai factory, where it currently produces the KONA electric SUV.

The Korean carmaker plans to bring IONIQ 5 vehicles partly put together at its Indonesian plant to India and assemble them via a method called semi knocked down or SKD at its Chennai factory.

Hyundai is slated to unveil the IONIQ 5 at India’s Auto Expo 2023, Asia’s largest automobile show, on Wednesday.

Kia exports its latest electric model, EV6, to India.

Industry watchers said Hyundai and Kia’s strong sales in India could make up for their sluggish sales in China.

Hyundai Motor India plans to launch six electric vehicle models by 2028.

The Indian government plans for EVs to account for 30% of vehicles running in the country by 2030 from about 2% at present. Cities in India are ranked among the most polluted cities in the world.

Other global automakers, including China’s BYD, are also actively launching their EV models in India.

While Renault plans to launch its electric hatchback Kwid in India, Stellantis is considering building an EV plant.

India is also among Tesla Inc.’s top candidates in Asia to build another Gigafactory, the US electric car maker’s vehicle, battery and component factory.

In November, Tesla Chief Executive Elon Musk said South Korea, alongside Indonesia, Malaysia and Thailand, is also among the Asian candidates for its Gigafactory.

Write to Hyung-Kyu Kim at khk@hankyung.com
In-Soo Nam edited this article.