Kia to develop small-size EV targeting India

Kia’s locally tailored model for the Indian market, the Sonet. [Kia Corp.]

South Korean automaker Kia Corp. is set to develop a small-size electric vehicle (EV) specifically designed for the Indian market.

According to sources from the automotive industry on Monday, Kia is currently working on the vehicle under the project name AY1.

Based on Hyundai Motor Group’s naming conventions, A indicates a small or compact passenger vehicle, and Y signifies a Kia model tailored for the Indian market.

Like the Hyundai Casper Electric, this vehicle could also be developed as a small sport utility vehicle (SUV).

Kia began developing the AY1 vehicle in early 2023.

Industry sources said that the development of the internal combustion engine version of the vehicle began first, with the goal of completion by January 2025.

They also noted that plans to develop the AY1 EV was recently added, aiming for a launch in the second half of 2025.

A long-wheelbase version of the AY1 EV, dubbed AY1 EV LWB, is also in development, targeted for release in the second half of 2026, they added.

The actual name of the AY1 model has not been disclosed, but sources note that possible names are Clavis or Syros.

According to information from the Indian Patent Office, Kia registered trademarks for these two names in late 2023 and early 2024.

The AY1 is expected to be priced in the 10 million won ($7,515) range for the gasoline model, while the electric version is anticipated to cost between 15 million won and 20 million won, according to industry sources.

Although Hyundai Motor Group has seen significant success in the Indian market, Kia’s growth in the market has been slower compared to its bigger sibling Hyundai Motor Co.

According to the Federation of Automobile Dealers Associations of India (FADA), Kia ranked 6th in domestic sales in India in July 2024, with monthly sales of 20,507 units, less than half of Hyundai Motor‘s 49,013 units. Kia also trails Japan’s Toyota Motor Corp., which ranks 5th with over 31,656 units.

While Hyundai Motor has introduced various localized models in India, Kia’s lineup is still relatively limited. Hyundai‘s India-specific models include the Aura, Creta, Exter, Alcazar, and Grand i10 Nios, totaling five models.

Kia sells four models in India: the Sonet, Seltos, Carens, and EV6, with only the small SUV Sonet being a locally tailored model.

The Carens was adapted from a previously sold Korean model for the Indian and Southeast Asian markets.

Industry insiders have a positive outlook on the potential sales of the AY1 in India and Southeast Asia, particularly given that India is a market with a strong preference for small cars.

Hyundai’s small hatchback i10 Nios saw more than 400,000 units sold in the country in August to date, and the Exter, which was awarded the 2024 India Car of the Year, exceeded 100,000 units in cumulative sales in July within a year of its launch.

Meanwhile, Kia announced in its semi-annual report that its sales in India fell 7.3 percent year-on-year to 126,000 units in the first half of 2024. Its market share also fell by 0.9 percentage point to 5.8 percent compared to a year ago.

Kia blamed the weakened sales momentum to the limited lineup and aging models, especially in the face of new model launches and aggressive marketing campaigns by competitors.