NEW DELHI -- India is increasingly drawing the attention of global automakers, as the world's fourth-largest market of 4 million autos shines with potential for further growth.
The market in the world's second-most-populous country is seen reaching 10 million autos in 2030. Local and foreign automakers alike are thus scrambling to ready their latest offerings to capture rising demand.
At the Auto Expo 2018 media preview on Wednesday near Delhi, Kia Motors announced its brand launch in India. "Even though we have arrived here a little late, we have come fully prepared," CEO Han-Woo Park said.
The South Korean company unveiled a concept model of a sport utility vehicle designed especially for India. The SUV is to be made at a plant slated to open in mid-2019 in the southern state of Andhra Pradesh. The facility, likely costing about $1.1 billion, will have the capacity to produce 300,000 vehicles a year. Combined capacity with parent Hyundai Motor will reach 1 million annually.
SAIC Motor, which skipped the expo as an exhibitor, is also gearing up for a debut in India. The Chinese automaker plans to locally assemble vehicles under British brand MG and release them here as early as 2019. Moreover, French automaker PSA Group appears to be considering returning for a third attempt in India.
Compact vehicles account for 75% of India's overall market. Top players such as Maruti Suzuki India and local manufacturers have a strong presence, but the market is likely to get crowded with more than 20 brands in the coming years.
The market is now facing a third wave of arrivals by newcomers. The first wave came in the 1990s when the Indian economy opened up to the world, drawing such carmakers as Hyundai, Toyota Motor and Honda Motor.
The second wave was in the late 2000s, when the market approached 2 million vehicles. Germany's Volkswagen, Renault of France and Japan's Nissan Motor were among many automakers that set up plants in India back then.
Yet establishing a presence is no easy task for latecomers, many of which struggle to expand their market shares. General Motors withdrew from India last year, with SAIC buying the local production facilities of the American auto giant.
Market leader Maruti Suzuki, which controls roughly half of the country's passenger-vehicle market, unveiled on Wednesday a concept model of a small SUV designed by Indian engineers for the home market. The company is stepping up efforts to attract young Indian consumers.
Honda is preparing to roll out six new offerings over the next three years including a revamped Amaze, said President Takahiro Hachigo, who is attending the expo. He highlighted the significant contribution of India in Honda's push to increase global sales.
Meanwhile, Toyota plans to release the Yaris compact sedan in India.
Electric vehicles are also a key focus at the expo, after the Indian government announced last spring a plan to sell only those cars by 2030. Local automakers Tata Motors and Mahindra & Mahindra unveiled their first electric vehicle concepts.
Tata's "Smart Energy Zone" exhibition featured six electric versions of existing models including a sedan, a hatchback and a bus. CEO Guenter Butschek told The Nikkei that the company is moving toward scaled up production of electric sedans.
Mahindra & Mahindra showcased its advantage in electrics by bringing a wide variety of electric concepts including an ultra compact car that can navigate through traffic jams, a three-wheel rickshaw, an SUV and a bus. The company bought home-grown startup Reva Electric Car in 2010 and operates an electric car plant in the western state of Maharashtra. It rolled out electronic rickshaws last year.
But numerous hurdles stand in the way of India as it shifts toward electrics. One is infrastructure development such as charging stations. And batteries used in the vehicles must withstand the country's extreme weather conditions. Electricity itself is scarce in many parts of the nation.
Consequently, even Maruti Suzuki is cautious of going all-out on electrics. The company unveiled its own version of an electric concept model Wednesday, reconfirming plans for a 2020 release. But "the country and industry still don't have their feet on the ground with electrics," said Kenichi Ayukawa, executive vice president of Suzuki who heads the Indian unit.