There is no change in our product launch schedule or capex plan: Kia Motors

There is no change in Kia Motor's product launch schedule or the capital expenditure plan, said the company, at at time when many auto majors have deferred investments and launches due to coronavirus pandemic.

The company says that it will launch its third product for India during the festival season. The new compact SUV 'Sonet' will strengthen the company's offerings in the utility vehicle segment, the only focus area for Kia for now in India.

Speaking to Business Standard, Manohar Bhat, Vice President and Head of Sales and Marketing, Kia Motors India, said that the last couple of months have been testing times for the industry and a learning experience too.

Further, the consumer sentiments are shifting especially with regards to the mode of transport for their daily commute.

"Indians will now prefer to use their personal vehicle for daily commuting than using public transport in order to maintain social distancing along with health and hygiene factors. However, it will take some time to see this shift on the ground," said Bhat.

"The government should consider reducing tax/GST on the purchase of new cars for the customers for a limited period. The reduction in tax will be an incentive for first-time buyers and we can see a surge in sales of passenger vehicles," he added.
On demand revival, he said, "It is too early to predict when the market will come back to normal. However, they are expecting gradual recoveries as 94 per cent of the company's customer touch points are now operational."

Despite all the challenges, the company will launch its third product 'Sonet', a compact SUV, during the festive season i.e. between August and October 2020.

As of now, there is no change in our product launch schedule or capex plan, he said.

Just like the Seltos, Sonet will be a global SUV, which will be made in India, for the global patrons.

Kia for now will continue to focus on utility vehicles, as the segment emerged as the most lucrative segment in the Indian market and currently it contributes more than 35 per cent to overall passenger vehicle sales. After Seltos and Carnival, the company is betting big on Sonet.

Seltos set a benchmark within just 4 months of its launch in 2019 as it acquired almost 39% market share, which increased during the period of January to May 2020 and stood at 56%.

"Kia Motors is also a prominent player in segments like hatchback and sedans at a global level.
However, it will be introduced in India once we observe a positive market sentiment in these segments. As of now, we are evaluating the market and will announce our future product line-up at an appropriate time," said Bhat.

On manufacturing, he said, the company resumed operations at its plant in Anantapur, Andhra Pradesh on May 8, 2020.

Currently, the company is producing over 5,000 vehicles per month with single shift production.

More than 85% of our employees working at manufacturing plant reside in Andhra Pradesh and at present, Kia has enough manpower to support the plant operations in one shift