What will it take for MG, Kia Motors to make it big in India?

While the Seltos and the Hector are not direct competitors despite being in the SUV segment (Seltos being smaller in size), for both Kia and MG, technology is the key differentiating factor that’s helped them swim against the tide. While entering India, MG wanted to distinguish itself as a brand to create its unique identity. Says Rajeev Chaba, president & managing director at MG Motor India: “Our product offering had to be different, our customer experience had to be different, our product assurance had to be different and we had to connect the whole thing back to technology. So, technology is our biggest pillar of differentiation.” Hector, thus, has over 50 connected features like remote control, a mobile app where one can check the condition of the vehicle and even locate it through ‘find my car’.

MG has also invested heavily in its two flagship stores in Delhi and Mumbai to provide a seamless retail experience to customers. The two stores house a café, an LED video wall that runs the company’s brand videos, and are decked up with British-themed props like the Union Jack, the Big Ben and iconic London phone booths. The Delhi outlet also has a  1956 MG Midget to reflect its heritage.

Kia too has tied up with telecom services provider Vodafone Idea to set up internet connectivity in a vehicle through a smartphone app. Christened UVO Connect, it enables features like remote locking, navigation and switching the engine on and off, among others, through the app.

Another reason for Kia’s success  is the market research done by Hyundai, its parent company. “We entered India with exhaustive market and customer research and we identified the unmet needs of the customers here. This has helped us plan our product and services better. Seeing the response, we can say our research was right on point,” says Kookhyun Shim, managing director and CEO of Kia Motors India. The company has invested $1.1 billion in its manufacturing plant in Andhra Pradesh that has a production capacity of 300,000 units per annum.

With the second largest market share in India, analysts agree that Hyundai’s research and results pushed Kia to further succeed in the Indian market. “Kia is close to Hyundai, and Hyundai has [globally] established itself as a passenger vehicle brand,” says Mitul Shah, vice-president, research, Reliance Securities. “The numbers for Seltos have continued to improve in the last six to eight months. Even when the numbers have become slightly lower [in December, when the car makers typically cut down production as buyers prefer newer units in a new year], Kia performed reasonably well selling 4,645 units.”

While MG has left no stone unturned to provide a technologically advanced product for the Indian market, its product assurance also stood out. “We have packaged the entire product under a scheme called MG Shield, where even the cost of ownership is going to be reasonable,” says Chaba. With MG Shield, the company assures customers a buyback price of minimum 60 percent after three years apart from providing various after-sales services and warranty.

Kia, too, is focussed on after-sales service. When the horn in Doshi’s car malfunctioned, it was promptly replaced in the first service, he says. 

Both Seltos and Hector gain with competitive pricing, starting at ₹9.89 lakh and ₹12.74 lakh (ex-showroom) respectively. It gives the two brands an edge in India’s price-sensitive market against vehicles like Jeep Compass and Mahindra XUV500, which start at ₹16.49 lakh and ₹12.31 lakh respectively. While Hyundai Creta and Maruti Suzuki Vitara Brezza come cheaper, at ₹9.99 lakh and ₹7.34 lakh respectively, Seltos and Hector score higher over these two brands with their sophisticated technology offerings.

Says Shim of Kia: “The success of both Seltos and Carnival is proof that the love between Indian consumers and good cars hasn’t faded away despite the slump in the industry.”


While both MG and Kia started off well in India, recent global factors have dampened their initial euphoria. Hector’s sales have pared down a bit in February, for instance. The company sold 1,218 units, a dip from their average of over 2,000 units sold per month. Says Shah of Reliance Securities: “The initial response for any product is high and it slowly goes down in most of the cases.” One of the cars caught fire on the road in Delhi and brought bad press for MG, while Kia is said to have been facing problems with the availability of spare parts and quality service in India. Forbes India could not independently verify this claim.

Add to that the raging Covid-19 pandemic in China and Europe that might disrupt the supply chains for both these companies, as it has for their Indian counterparts. While China is on a recovery trajectory, the epicentre of the pandemic has moved to Europe, where multiple cities have gone under lockdown and the economy is expected to wobble for several months now.  Says Chaba: “We have a global supply chain, where some components come to India through both Europe and China. If the coronavirus continues to wreak havoc in Europe, our supply chain will be affected. But China is recovering and we should be back in action within three to four weeks.”

For Kia, which sold 15,644 units in February, Covid-19 hasn’t yet impacted their production. “But we are keeping a watch on the development to gauge future impact,” says a spokesperson. 

Some auto experts attribute the falling vehicle sales in India to the introduction of the stringent BS VI emission norms from April 1 as well as the government’s push for electric vehicles (EVs), auto’s new ‘sunshine sector’.