‘Kia has chosen relevant and attractive segments’

As Vice-President and Head of Global Product Management at Hyundai Motor Group, Lorenz Glaab clearly has a huge responsibility.

There are two big brands in the stable — Hyundai and Kia — each with its own distinct DNA to reach out to customers across the world. In India, Kia has been the clear flavour of the season with its Seltos SUV growing from strength to strength in barely six months since it was launched.

“In a given segment, you have several customer clusters along with several requirements. With Hyundai and Kia, we try to cater to these different needs and clusters,” says Glaab.

From his point of view, the two Korean automakers represent different brand identities and attributes. It is, therefore, only logical to have a different product design language for those clusters.

Glaab believes that with the Seltos, Carnival and the soon-to-be-launched Sonet entry SUV, Kia has chosen the “very relevant and very attractive segments” for people’s needs. “Here in India, you don’t need to be in every segment and it is important to be focussed on the right ones,” he says.

Hyundai, on the other hand, has been around for many more years with its full line of products in India and it is only natural for Kia to take a different approach. “These are separate brands with separate identities even while we belong to a (common) group,” elaborates Glaab.

As the market in India matures and “society also matures in many aspects”, the country will also become better aligned with developed markets across the world. “That is only inevitable and explains why we will have a good balance with global models and local models from Hyundai and Kia,” says Glaab.

These are clearly not the best of times for the automotive industry, with top movers and shakers like China in the midst of their worst slowdowns in recent times. What is even more worrying lately is the spread of the coronavirus outbreak, which is threatening to throw the entire automotive supply chain ecosystem out of gear.

Glaab, however, remains optimistic about the road ahead. “There is never a bad moment for launching a good product,” he says, citing the example of the Seltos, which made its debut during a “very challenging market environment in India”.

Yet, the SUV took off with a bang and sales soared since “everything was right” in terms of product, segment, launch preparation etc. In no time, the Seltos has become the most successful brand in the SUV space, which has prompted Kia to plan a far more aggressive product blitzkrieg in India.

Product is core

“To us, the core is the product and this is essential even while there will be new parameters in mobility, ride sharing, etc. This is where we put a lot of focus here in India in terms of product, price, segment and so on,” says Glaab.

Even while the industry is gearing up for mobility disruptions during the course of this decade, which could see threats emerge on vehicle ownership, he believes that the future will see “several big customer clusters” running in parallel. “Yes, we will have customers who are happy to share (rides) as well as those who would want to own a vehicle not only in India but across the world. All this makes the whole business more complex but also more challenging and interesting,” says an upbeat Glaab.

While Hyundai has been around for over two decades now in India, with a host of successful brands in its kitty, it is a different ballgame for Kia, which began its innings only recently. “As a young brand, it is much more important for Kia to explore the challenges and this lies in seeing the right trends,” he says.

It is also important to “strike the balance and mix” between a host of markets. India, for instance, has its own peculiarities but it is still imperative for manufacturers to check what will interest the customer and work in that direction on product development. “All this makes the automotive industry a very exciting industry to work in,” says Glaab.

With two strong brands, Hyundai Motor Group has now established a footprint in India with manufacturing plants, centres for R&D, engineering and design along with sales and marketing headquarters and a dealer network. “This will allow us to leverage resources and build customer connect optimally,” he says.

Size and potential

According to Glaab, India plays a different role from other emerging markets because of its sheer size and potential. Inputs from here could also be used to build up market knowledge globally and come up with creative mobility solutions to take on the challenges of urbanisation.

The Indian landscape is also seeing the influx of Chinese automotive brands such as SAIC, Great Wall Motors, Changan Auto and FAW. Like Kia, SAIC has also got off to a good start with its MG brand, where the Hector SUV is notching up pretty good numbers.

Glaab agrees that the Chinese are “very dynamic” and it is more than apparent that some of their homegrown brands are pushing the envelope in areas like R&D, design and scale. He believes that their growth story is akin to the Japanese and Koreans who were in this space decades earlier.

“The more the competition, the better it is for everyone. I am not worried and look at this as an opportunity rather than a challenge,” continues Glaab. As he quips, China joining the world automotive terrain is more than welcome since it will keep everyone on their toes.

The mood turns slightly sombre when the topic veers around to the possibility of some dark clouds on the horizon beyond the slowdown and the coronavirus spread. “I think we have to be a little careful as an industry when it comes to regulation and the ability to foresee market demand,” says Glaab.

In his view, this is a “big area of complexity for every OEM”, especially when “you do not purely have the customer in mind any more but need to deal with a lot of regulation change”. All this is only causing more complexity in the product planning arena.

The EV challenge

“This is a concern obviously,” says Glaab, discussing the example of electric vehicles, which will doubtless be a challenging business even while it is still in its infancy. Till now, the growth of EVs has largely been a result of government subsidies but once they are withdrawn, the script can turn completely awry, as it did in China.

Equally, argues Glaab, it is not as if electric needs to be the sole solution for clean emissions. There are other “great technologies like fuel cells” which can also play a role in this direction. Hyundai Motor Group has some big plans which could see both Hyundai and Kia emerge as prime movers in this space in the coming years.

Press Glaab for more details and he signs off with a diplomatic response. “I think what India can expect is a lot of excitement to look forward to,” he says. The way Kia has begun its innings here with the Seltos only reaffirms his view.

Go back to 1998 and it is exactly how Hyundai created a storm with the Santro. The company has emerged the only serious rival to Maruti Suzuki since then. With Kia in tow, it marks two Korean brands from the same group which are determined to carve out their own identities.

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