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Korean, Chinese menu set to tickle taste buds in car arena

Murali Gopalan | Updated on August 23, 2019 Published on August 23, 2019

The MG Hector and (top), the Kia Seltos

Kia Seltos

With the entry of Kia and MG, the Indian automobile market is poised for interesting times

Kia and MG are the new kids on the block and have thrown down the gauntlet at a time when the industry is going through a pretty rough slowdown.

On the face of it, both their offerings have had a heady response thus far, which is terrific news to boost customer sentiment. Going forward, it will be interesting to see how the Kia Seltos and MG Hector sustain the momentum and keep volumes ticking.

One of the key elements here will be brand perception. Kia Motors is Korean and well known across the world as a premium car-maker. To the Indian customer who is well travelled and constantly surfing online, the connect will therefore not be a problem.

In addition, a Korean brand recall is a positive thanks largely to Hyundai’s successful growth story over the years. This will be a huge bonus for Kia, which is also part of the Hyundai group. Both companies have, however, reiterated that they will steer clear of each other in India at the retail end, even while there will be cost synergies at the back end.

MG’s perception

How about MG Motor in comparison? Its owner is Chinese (SAIC Motor Corp) even while the brand positioning is British. The moot point, though, is how the customer will perceive the Hector. To some industry experts, it will “clearly be seen as being Chinese” even while a few argue that this may not be the case.

The bookings response to the Hector has been encouraging but now with the Seltos joining the parade, the see-saw could tilt either way. At one level, the Chinese association has become fashionable in the cellphone market but it is too early to pass a verdict in a product like a car. After all, hardcore engineering is a different ballgame from electronics.

These are early days yet but Kia could score on easier brand familiarity and the comfort of the Korean success story thanks to Hyundai. MG/SAIC will perhaps have to push the envelope a lot harder because the brand is starting from scratch and building customer faith in a Chinese product could just take longer.

Yet, there is no taking away the fact that both companies are determined to go flat out and prove a point in India. Kia has taken its time in making an entry but, unlike Hyundai, will need to deal with an all-new buyer base.

New customers

This is an Internet generation whose priorities are completely different from their parents who perhaps drove around in a Santro. Two-thirds of the country is also under 35 years of age and this will be the target audience for the Seltos.

These customers are also well-travelled with greater levels of affluence and aspiration. They are also open to trying out new brands, which also do their bit in ‘social stature enhancement’. To that extent, Kia is well poised since it entering at a time when the automobile market is entering yet another interesting phase.

Sure, the slowdown is a matter of concern right now but it is not going to last forever. SUVs are the fastest growing product category and, additionally, there will be interesting dynamics panning out in the form of electric mobility, connectivity and so on. Further, car penetration in India is still low and Kia will be hoping to draw more buyers to its stable in the coming decade.

The same parameters hold good for MG Motor even while it may have to try harder to overcome any negative Chinese perception. Yet, this does not take away the fact that SAIC is a large automobile brand keen on spreading its presence globally.

At one point in time, it was keen on teaming up with General Motors for the Indian innings but the latter bowed out of the market. SAIC is now the new resident of the GM facility at Halol and has been working at a feverish pace since the time it took charge.

It is also very likely that SAIC could pave the way for other Chinese companies to set up shop in India. The likes of Changan, Great Wall Motors and Geely have exploring an entry for a while now. Tata Motors is also said to be in talks with Chery though there has been no official confirmation yet.

Take the case of Geely that is now a name to be reckoned with in the global automobile arena. Its acquisition of Volvo Cars has turned out to be a big success story while, in more recent times, it has snapped up stakes in Volvo Trucks and Daimler AG.

Electric is also the frontier the Chinese will be eyeing with great interest especially with the Centre making its intent known in this space. China is now leading the world in this space and will be keen on leveraging these competencies in India.

Kia and MG have signalled a new phase in the Indian automobile arena. They will have to contend with established players like Suzuki (which will get more proactive with Toyota) and Hyundai along with a host of others. These are interesting times for sure.

Published on August 23, 2019
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