The standing of India’s auto industry stopped Kia, the second largest automaker in Korea, from operating in the said country. It was reported that the Korean automaker came up with the decision of constructing an auto plant in India to produce more cars for its consumers but it did not went through. Find out what really happened in this article.
Why did Kia Rule Out its Plan?
The automaker considered the growth of India’s auto market and was not much impressed with it. It planned to construct the plant in Gujarat and have it operational during the first half of 2013. However, it did not push through. Instead, Kia looked for other countries that would be perfect for its plan of expanding globally. It preferred to work with developed countries and this is confirmed by Michael J Choo of Kia. He confirmed this and mentioned that the automaker wanted to focus more on other overseas markets including those from America, Europe, and from China to continue its goal of producing millions of cars for its consumers. However, before it decided to drop India on the list of its potential candidates, there was a feasibility study made on the market and it gave a positive result. The study was conducted by Synovate, a well-known market research consultancy firm based in the U.S.
On the other hand, the government of India claimed an increasing growth on its auto sales. The government is proud of its rising demand, income, and skilled manpower. In fact, it is expecting that the performance of the auto industry of the country will improve and will be known by 2015. It continues to play a great role in the production of numerous heavy duty buses and trucks. The country’s production reached a total number of 1.69 million buses, trucks, and other vehicles including the passenger vehicles, two and three wheelers, and commercial vehicles in 2012. Such is based on the data published by the Department of Industrial Policy and Promotion (DIPP). There was a registered growth by 2.03 percent on exports from April to August 2013, too.
In addition, the automaker will still consider the idea of constructing a plant in India in the future. It will continue to monitor the growth of the country’s auto industry. All of these did not stop automakers like Hyundai Motor and Ford Motor Co. from setting foot in the country for the production of their product lines. The Indian market is important for both automakers for it registered growth during the years that they were working together.
Manufacturing Plants Constructed in Other Countries
Kia constructed a manufacturing plant in West Point, Georgia for the yearly production of 300,000 cars each year and sold at local dealerships like Team Kia of NH. There was another plant constructed in Slovakia on 2006 as the automaker wanted to increase its output. The plant reached the full production capacity since it started operating in the same year. Just like its other plants, the Slovak plant would cover the production vehicles for export. These mark the continued success and growth of the automaker despite the tight competition in the industry.