Kia Seltos’ success will continue to haunt many new car launches

When South Korean car brand Kia launched its first SUV, Kia Seltos, in India in August 2019, it had a lot of odds stacked up against it. The sector itself was going through the worst ever sales slump across two and four wheelers. Added to that, India is predominantly a small car market, leaving a large section of buyers away from it.

Yet, it looks like Kia, which set up a factory in Andhra Pradesh, seemed to have packed in what Indians want - good quality at value. By March 2020, it became the largest selling SUV, surprising even the trade pundits. Soon, it had a problem that many automakers would love to have, way too much demand which is affecting their delivery time, making them switch to two shifts.

“KIA’s successful entry in India has further enabled the group to gain market share. KIA is a great example of successful badge engineering, something other original equipment manufacturers like Renault-Nissan have been unable to accomplish,” said Sumit Bali, president and head of retail lending and payment, at Axis Bank said during an Axis Capital conference.

Cool and futuristic features

Its attractive price point at around Rs 9.8 lakhs, Indian love for compact SUVs, and its futuristic technology, and the tiger-nose grille design was too good to pass up. The car was already BS6 compliant which would mean that buyers would not have to worry about changing regulations for a long time. Their range offers the best engine options as well.

The success was replicated by all their launches after like Kia Sonet and Kia Carnival had a lot of “cool features” like voice commands, a sun roof (which is now an ultra popular feature across cars of all sizes), wireless charging and more. But Kia Seltos remains its flagship car as its market share went up to 5.14% in January 2021, even in a declining sales market.

Within months of its launch, Kia Seltos outsold two of the most popular cars in the compact SUV segment - Hyundai Creta and Maruti Brezza - during some months. But it’s not just the older models that has Seltos as its competitor. A large number of car launches are being planned in 2021-22, and they will have to displace Seltos from its throne.

As per an Axis Capital report, Eyecatchers, Seltos features as a key competing model for as many as nine of the new car launches planned in the coming financial year. The automaker who might see most competition from Kia Seltos could be Mahindra & Mahindra, whose three launches fall in the category including a next generation version of Mahindra XUV500.

Kia will also be going against yet another new entrant into the Indian market - MG Motors. Two of its three new launches namely MG ZS and a six seater version of MG Hector might have to compete with Kia Seltos in addition to Mahindra XUV500 and Hyundai Creta.

Here is a list of new car launches in Seltos’ sweet spot.

Model	Launch date
Maruti Suzuki’s unnamed large SUV	FY22
Mahindra’s new TUV3OO	FY22
Mahindra’s next-gen XUV 5OO	Q1FY22
Mahindra’s XUV400	FY22
MG ZS	FY22
MG Hector 6-seater	FY22
Skoda Kushaq	May-21
Volkswagen Taigun	FY22
Volkswagen T-ROC	FY22