Companies

Kia unveils strategy to drive growth in EV and mobility services; to invest $25 billion by 2025

V Rishi Kumar Hyderabad | Updated on January 25, 2020 Published on January 25, 2020

India plans include production of 300,000 units by 2022, and launch of RV models

Kia Motors Corporation has announced a 'Plan S’ strategy aimed at establishing a leadership position in the future automotive industry, encompassing electrification and mobility services, as well as connectivity and autonomy.

Alongside Kia’s 2025 financial and investment strategy, details of Plan S were announced to shareholders, analysts and credit-rating agencies at the company’s CEO Investor Day in Seoul recently.

The strategy outlines Kia’s pre-emptive and enterprising ‘shift’ from a business system focussed on internal combustion engine vehicles toward one centred on electric vehicles (EVs) and customised mobility solutions.

By the end of 2025, Kia plans to offer a full line-up of 11 battery EVs (BEVs). With these, it is looking to achieve a 6.6 per cent share of the global EV market (excluding China), while also garnering a 25 per cent share of its sales from eco-friendly cars. With the global EV market expected to gain strength by 2026, Kia is aiming for 500,000 annual EV sales and global sales of 1 million eco-friendly vehicles (excluding China).

Alongside these objectives, Kia will offer EV-based mobility services as part of its new business model, helping solve global urban problems such as environmental pollution. In the purpose-built vehicle (PBV) market, anticipated to grow on the back of expanding car-sharing and e-commerce businesses, the company will secure leading-edge competitiveness, said the company.

Key goals

Towards this transition to EVs, Kia will seek to popularise EVs, launch a dedicated BEV model in 2021, establish an EV line-up of 11 models and reach a 6.6 per cent global EV market share by 2025, sell 500,000 BEVs and one million eco-friendly vehicles by 2026.

It also plans to nurture key developed markets as major bases for EVs and establish mobility hubs in cities with stricter environmental regulations.

Plan S will see Kia Motors invest a total of 29 trillion won ($25 billion) by the end of 2025 to establish leadership in vehicle electrification and help it diversify its business, the company said.

“As the auto industry undergoes turbulent changes, today is also an opportune time for Kia Motors to radically transform itself into a global enterprise dedicated to spearheading customer value-led innovations,” said Kia Motors President and CEO Han-woo Park. “Kia Motors will actively innovate to take on the challenges ahead, identifying and capitalising on new opportunities to propel the company forward.”

“Plan S is a bold and enterprising roadmap for Kia’s future business transition, buttressed by the two pillars of electric vehicles and mobility solutions. Our approach is to put customers first, and Kia will reinvigorate its brand innovation by developing products and services that offer new experiences for customers,” he added.

India plan

Kia has outlined plans to accelerate growth in the Indian market and take its annual production to 300,000 units by 2022.

Having successfully landed in India, Kia’s penetration of the world’s fourth-largest auto market will continue, it said. Following last year’s successful inauguration of a plant in Andhra Pradesh and the introduction of the Seltos SUV, Kia intends to continue its growth trajectory by adding new RV (recreational vehicle) models. This will enable the factory to meet its production capacity of 300,000 units per year by 2022.

Plan S objectives

As the two strategic objectives of Plan S, Kia will concentrate on leading the popularisation of EVs, and expanding mobility services for electric and autonomous vehicles, as well as entering the PBV business.

By prioritising future customer value, the company also plans to develop and release innovative EV models, offering a differentiated product appeal, such as an EV-specialized design, user experience and quality. Starting with the launch of its maiden dedicated EV model in 2021, Kia will establish a full line-up of 11 EV models by 2025, adding new models to its whole line-up along the way, including passenger vehicles, SUVs and MPVs from 2022.

Crossover design

It will offer a crossover design which blurs the boundaries between passenger vehicles and SUVs, a future-oriented user experience, a single-charge driving range of over 500 km, and sub-20-minute high-speed charging time.

In emerging markets, Kia will focus on expanding sales of internal combustion engine vehicles, while reviewing the selective entry of EVs depending on the demand in each market.

In the long term, the company aims to operate self-driving robotaxis and on-demand roboshuttles in urban centres that also operate the mobility hubs.

Over the next two to three years, a period during which Kia will continue to release new volume models such as the Sorento and Sportage, the company will harness all efforts to enhance its profitability via improvements to its sales mix. The sales ratio of SUVs, which currently stands at 50 per cent of all models, is expected to rise to 60 per cent by 2022, excluding the China market.

Founded in 1944, Kia sells around 3 million vehicles and employs more than 52,000 employees worldwide with annual revenues of over $49 billion and manufacturing facilities in five countries.

Published on January 25, 2020
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