MG Motor, Kia Motor tap growing demand for utility vehicles to expand

MG Motor India Pvt. Ltd and Kia Motor India Pvt. Ltd—the latest entrants in the domestic automobile market—are intensifying their focus on the growing utility vehicle segment to consolidate their presence, according to senior executives at both carmakers.

The companies are betting that higher disposable incomes and a growing appetite for utility vehicles (UVs) will help them attract more Indian buyers.

Such premium vehicles are categorized under the D-segment with a length of 4.5 to 4.7 metres. They are powered by engines of at least 2 litres and cost on an average at least ₹28 lakh.

MG Motor India, a subsidiary of China’s SAIC Motor Corp., showcased its Gloster sport-utility vehicle (SUV) at the recent Auto Expo 2020. South Korea’s Kia introduced its Carnival multi-purpose vehicle (MPV) at the same event.

“We see customers maturing from their existing cars to premium vehicles with preference for SUV body types. We have showcased SUVs, MPVs, bigger UVs at the expo and based on the customer response we would evaluate them for India," Rajeev Chaba, president and managing director, MG Motor India said recently.

He said MG sees opportunity in the ₹30 lakh- ₹50 lakh bracket in which the brand is positioned as a bridge between mainstream players such as Maruti Suzuki India Ltd, Hyundai Motor India Pvt. Ltd, and luxury carmakers such as BMW, Audi, and Mercedes-Benz India Pvt. Ltd.

MG has faced robust demand for its Hector SUV which went on sale in June 2019. Kia, on the other hand, also had a strong response to its maiden product, the Seltos SUV, since its launch in August 2019. MG plans to launch the Gloster by Diwali this year by producing it at its plant in Halol, Gujarat. The company, which plans an eight-model portfolio until 2025, is investing about ₹2,500 crore to expand the plant’s annual capacity from 36,000 units to 100,000 units over the next few quarters. “We can see dynamism in the C- and D-segments with a crossover SUV body type in particular," Lorenz Glaab, vice president and head of global product development at Hyundai-Kia Automotive Group said, referring to the stable demand for mid-size and premium cars even when market conditions were tough in India.

While MG’s Hector and Kia’s Seltos belong to the C-segment of SUVs, D-segment models include Toyota Fortuner, Ford Endeavour, Skoda Kodiaq, Honda CR-V and Mahindra Alturas G4.

Kia’s Sorento and Telluride are the D-segment SUVs in global markets. The two SUVs are being evaluated for potential launch in India, said three people aware of the plans, requesting anonymity. Glaab, however, declined to comment on individual products.

The Carnival fills a spot in the India market that is not really covered, Glaab said. “This we saw as a great opportunity and so far the market demand is proving us right," he said, referring to the initial bookings of more than 1,400 units that the company had received on the first day of opening bookings. Kia launched the Carnival on 5 February in three variants with 7-9 seating configurations in the price range of ₹25 lakh- ₹34 lakh.