INTERNATIONAL BUSINESS

CIA-1
INTERNATIONAL STRATEGY AND PROCESS
OF
KIA

An assignment submitted in partial fulfilment of the requirements for the degree

of
Master of Business Administration

BY-
ABHIJEET SINGH

REGISTER NUMBER
2028102

Under the Guidance of

Dr. Jeevananda S

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COMPANY OVERVIEW ABOUT ORIGIN AND INTERNATIONALISATION:

Kia Motors, based in Seoul, South Korea, is a well-known name in the world of mobility for
its safe, dependable, and stylish automobiles. Kia Corporation is Korea's oldest automobile
manufacturer, having been formed in May 1944. Kia has developed from humble beginnings
as a maker of bicycles and motorcycles to become the world's fifth largest car manufacturer
as part of the dynamic, worldwide Hyundai-Kia Automotive Group. Hyundai owns a third of
the vehicle manufacturer. Kia has increased its product offering in recent years to meet the
evolving demands and tastes of youthful riders. Kia currently manufactures over 1.4 million
automobiles per year in 14 manufacturing and assembly plants across eight countries. A
global network of over 3,000 distributors and dealers sells and services these vehicles in 172
countries. The company employs over 40,000 people and generates over US$17 billion in
annual revenue. Kia has a substantial presence in other parts of the world, including North
America, Europe, and Asia Pacific, in addition to its home market of South Korea (including
its fast surge to market-leader in SUV category in India). Kia's success has largely been
fueled by its commitment to producing creative, safe, and dependable vehicles that cater to
the tastes and needs of the modern age. SUVs, sedans, hatchbacks, crossovers, MPVs,
hybrids, and completely electric cars have all been part of the company's product portfolio.
The Eco-Technology Research Institute, based near Seoul, is working on future hydrogen
fuel-cell cars as well as cutting-edge end-of-life vehicle recycling technologies and processes.
Kia invests 6% of its yearly revenue in research and development and operates research
centres in the United States, Japan, and Germany

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GLOBAL CHALLENGES:

Intense competition in the industry: there is no second thought on that greater focus on
technical innovation, increased demand for SUVs, and other factors such as rising middle-
class income, the global automobile industry has become more competitive. While all of
these variables lead to severe rivalry in this industry, existing businesses in many markets are
protecting their turf against Kia Motors, a newcomer. Kia is locked in with some of the
industry's greatest names, including Ford, Toyota, GM, and even its own parent firm
Hyundai.

Regulatory threats: The enormous web of rules that regulates the automobile industry's
expansion and growth is one of the industry's major challenges. Previously, a huge number of
automobile brands had to pay hefty fines for noncompliance and regulatory infractions.
Businesses must follow labour laws in addition to rules and regulations governing product
quality, environmental safety, and passenger safety. Furthermore, laws vary by market, so an
automotive manufacturer must first assess the legal environment in a given region before
entering it. Kia has been cautious about these issues and we can get to know that by its
performance in United states and China with proper compliance and descipline, as well as
product quality and passenger safety. It has established a positive reputation as a responsible
business that values its customers and community.

Impact of the pandemic: Demand has moved dramatically, and automakers in general, not
just Kia Motors, may need to address some concerning distribution difficulties. Although the
impacts of the pandemic may take years to diminish, vehicle manufacturers, suppliers, and
distributors must continue to function. Overall, the automobile industry has seen one of its
most difficult eras in the twentieth century. Because of the pandemic's economic
consequences, most people will find it difficult to achieve faster growth following the
outbreak. Economic fluctuations: The state of the global economy is one of the primary
variables influencing demand for automobiles, particularly SUVs and other vehicles. When
the global economy is in good shape, car sales increase and manufacturers earn more money.
Automobile sales are lower when economic conditions are severe in a given market or around
the world because consumers avoid making non-essential purchases during these times. Prior
to the outbreak, the global economy was growing, with key markets such as the United
States, China, and India all seeing strong GDP growth.

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Brand Image: Although Kia has made significant strides in recent years in terms of brand
development, many consumers still regard the company as a discount brand rather than a
premium one. Kia-logo It takes years to get all of your customers on the same page.

KIA’s INTERNATIONAL STRATEGY:

 KIA’S Plan ‘S’ Strategy: This is a long term strategy with an agenda of leading the
upcoming automobile market with automation, connectivity and electric vehicles
market. Kia aims to invest $25 billion in this strategy to make the transition process
happen smoothly. Kia plans to get a 6% operating profit margin and a 10.6% return
on equity (ROE) ratio by the end of this term.
 Kia Motors is persuaded by the dominating business environment to get a vital
competitive advantage over others in order to stay ahead of the competition. As a
result, Kia Motors has embraced the focus approach in terms of low cost and greatest
value. Serving the demands of a position market segment at the lowest possible price
is the low-cost focus strategy. This strategy demands Kia Motors lowering prices and
obtaining appropriate marketing and advertising tactics to increase sales in the
existing customer base.

AFFILIATES AND SUBSIDIARIES:

 HYUNDAI MOTOR COMPANY ( Hyundai Motor Company owns a 33.88% stake

in Kia Motors.)
 KIA AMERICA
 KIA CENTRAL AND SOUTH AMERICA CORP.
 KIA EUROPE
 KIA MEXICO
 KIA INDIA
 KIA DEFENCE
 KIA LUCKY MOTORS PAKISTAN (Joint venture between Lucky Cements and
KIA)

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Evaluation of how the company has an alternative strategy for a different country based
on the local environment: (INDIAN MARKET AND SAUDI ARAB)

The challenge for Kia Motors was to figure out which product or combination of products
would be most successful in the Indian automotive industry. Given the continuing rise in the
share of Utility vehicles (UV) [including compact SUVs] as a percentage of total passenger
vehicle (PV) sales in India, the company chose the Seltos compact SUV as its debut product..
And on the Korean market still Sedan and Hatchbacks are in trend but for Indian market they
changed the strategy. The company set a competitive price for the feature-rich, comfortable,
and well-connected Seltos at Rs. 9.6 Lacs (ex-showroom, India). It was available in 16
different variations, giving purchasers a lot of options. As in India it is the mentality of the
people that if they are spending too much than they will prefer brand which place is already
taken by BWM and Mercedes so for Kia it was crucial to put Competitive pricing. It also
built a new Greenfield facility in Anantapur, Andhra Pradesh, to produce locally and cut
expenses.

Since the early 1980s of the twentieth century, KIA has had a presence in Saudi Arabia.
Because of Korean origin which was not supposed to be that powerful as compare to
Japanese and Americans brands like Toyota, Nissan, Ford , Kia faced many challenges and
brand image and customer perception were not in the favour of Company. So Kia entered
Saudi market with a whole new strategy and financial model design to get in customers
minds. The corporation opted to establish an exclusive agent in the country under a joint
venture arrangement with Al Jabr Group.

CONCLUSION:

Kia is adopting Product Differentiation strategy to be the leader in EV industry through

dedicated EV model and progressing through innovation system. When it comes to India,
which is a foreign market for Kia vehicles, Kia Seltos became India's fifth largest automotive
brand just two months after its launch, with sales of 12,850 units in October 2019. This was
owing to the company's seamless strategic planning (which included all aspects of its
operations) and execution on the ground. Kia has announced that, in keeping with its existing
India market strategy, it intends to limit its future intentions to the utility vehicle (UV) sector
and avoid the small car market entirely. Kia will focus on securing its leadership in the global
EV market by adopting a strategy of product differentiation, such as launching a dedicated

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EV model, as well as by establishing a company-wide innovation system. (Pre-emptive
transition to EV business)

REFERENCES:

 https://worldwide.kia.com/int/company/ir/info/company
 https://en.wikipedia.org/wiki/Kia
 https://www.koreascience.or.kr/article/JAKO201816357066647.page

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