FAR EAST: SOUTH KOREA REPORT
Kia is pursuing its own EV strategy centered on specific applications such as delivery vehicles and cabs. The company is jointly developing delivery vehicles with Korea’s largest online retailer, Coupang, and customer specific EVs will account for 1 million of the 1.6 million EV sales target for 2030. A dedicated plant will also be built in the suburbs of Seoul.
The company and Coupang will develop vehicles with increased cargo capacity and refrigerated and frozen interior equipment, with the assumption that only one driver will be on board. Coupang will have its own distribution center and delivery vehicles for high-speed delivery and will hire drivers directly. Coupang has indicated that it plans to operate 10,000 EV delivery vehicles in the future.
It has also signed a joint development agreement for delivery trucks with CJ Daehan Transport, the largest land transportation company in Korea. It will also develop EVs suitable for refrigerated delivery in cooperation with restaurant chains and other companies.
First, Kia will accumulate expertise in individual development and mass production based on collaboration with domestic companies, and then begin to receive orders from overseas clients in the U.S., Europe, and other regions.
Kia will build a plant dedicated to EVs to expand PBVs in Hwaseong City in the Seoul metropolitan area. Construction will begin by the end of 2023, and the company plans to secure an annual production capacity of 150,000 EVs by the second half of 2023.
The Hyundai Motor Group, including Kia, is applying the “E-GMP” EV platform to all EV models. The structure allows for a high degree of flexibility in vehicle interiors, as the batteries are laid under the floor.
Hyundai Motor Group’s global sales volume for 2022 is 6.84 million units, of which 2.9 million units will be sold by Kia. Although Kia is inconspicuous in the shadow of Hyundai Motor, its sales volume is on par with that of Japan’s Suzuki Motor, and it boasts sales of US$64.9 billion (9 trillion yen). With an efficient marketing strategy centered on Korea, the U.S., and Europe, Kia’s operating profit margin in 2022 will be 8.4%, higher than that of Hyundai Motor (6.9%).
Source: The Nikkei
PSR Analysis: Kia’s clear target for commercial vehicles seems to be well received by the market. Kia used to focus mainly on small cars, but in recent years it has been focusing on SUVs and luxury sedans and has been competing with Hyundai in an increasing number of cases.
I believe that EVs will spread more quickly in the commercial vehicle market because they are more cost-conscious. Kia is trying to find an opportunity in the commercial vehicle sector, where other major OEMs have not focused their efforts so far. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
