Hyundai Motor reports 21 percent drop in 1Q profit

Hyundai Motor reports 21 percent drop in 1Q profit

Kia will build a brand new manufacturing facility for its India operations in Anantapur, Andhra Pradesh at a cost of a whopping Rs 7050 Crore ($ 1.1 Billion).

Kia Motors wants to achieve a localisation level of 40% at launch. Without its own production line, Kia could not enter the market due to steep tariffs on imported cars. The company plans to introduce a revamped Sonata sedan later this year, he said. The manufacturing facility is expected to begin production in the second half of 2019 with an initial capacity to produce 300,000 units per year. The compact sedan segment has witnessed a decline in sales-automakers such as Maruti Suzuki India Ltd and Hyundai Motor India Ltd are set to introduce new models to reinvigorate sales. The Kia factory site will also have several suppliers setting up shop in the vicinity of the plant, though several of Hyundai's suppliers may also supply to the plant.

Kia will produce strategic compact sedan and compact SUVs, especially for the Indian market at the new plant.

Hyundai has been doing well in our market off late and its compact SUV- Creta has been crunching some really great numbers for the Korean carmaker.

The Indian auto market is growing at a rapid pace and over 3.3 million new cars were sold in 2016.

Kia Motors, the nation's second-largest automaker, saw its profit tumble in the first quarter, affected by soured consumer sentiment in China as well as a stronger local currency against the USA dollar. "Based on what happened between China and Japan over a territorial dispute in the past, sales could recover around the end of the second quarter or beginning of the third quarter", said Chang Moon-su, an analyst from Kiwoom Securities.

Forecasts suggest the country will become the third-largest auto market by the end of 2020, it added. Bhargava says the Indian market has the potential to grow to up to ten mn units annually in the coming years and no other country can offer such an opportunity. Its bigger affiliate Hyundai makes 650,000 vehicles in India a year.

SAIC, biggest vehicle maker in China, and France's PSA are also preparing for an India entry.

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