Are you an automobile enthusiast, seeking a dealership opportunity in this industry? Have you been searching for renowned International automobile franchise in India? Starting a Kia Motors dealership can be a lucrative and rewarding business opportunity for aspiring candidates.
In this article, we’ll guide you through the process of owning a Kia dealership, along with its costs, fees, and profit margin – and answer some of the commonly asked question on this chain.
We also guarantee that after reading this complete article you will be in a position to understand more about Kia and choose a perfect automobile franchise.
- Brand: KIA Motors
- Founded: 1944 in Seoul, SK and 2019 in India
- HQ: Seoul, South Korea
- Founder: KIA Corporation
- Area Required: Min. 3000 sq. ft.
- Revenue: 24,600 units (FY22)
- Deposit Fee: ₹20 lacs – 30 lacs
- Profit Margin: Varies
- Showroom Frontage: 40-50 ft
- KIA showroom dealership cost : Rs. 5 Crores – 10 Crores
Table of Contents
Overview of Kia Dealership
Founded in 1944 under the name Kyungsung Precision Industry, which was later changed to Kia Industries, Kia Motors has become one of the most prominent and beloved automotive manufacturers in the world.
The chain manufactures a wide array of vehicles, including sedans, SUVs, electric cars, and hybrids, allowing them to capture the hearts of consumers worldwide.
In 2019, Kia made its entry into the Indian automotive market with Kia Motors India, a wholly-owned subsidiary of Kia Motors Corporation. Since then, the brand has witnessed immense demand and garnered a massive fan following in India.
The chain had invested over $1 billion in setting up its best-in-class manufacturing facility in Anantapur, Andhra Pradesh.
One of Kia’s notable successes in India has been the introduction of the Kia Seltos in August 2019. This model quickly became a sensation among Indian consumers, experiencing significant demand and becoming an instant hit.
To serve its consumers effectively, Kia Motors has established a robust dealership network across India. With over 330 car showrooms spread across 225 cities, Kia ensures that customers have convenient access to its vehicles and services.
The chain has its headquarters in Seoul, South Korea, and also a multiple manufacturing facilities in international markets, such as the United States, South Korea, India, Canada, and Europe.
This global manufacturing network has played a crucial role in solidifying Kia’s status as a truly global brand with a strong presence in various international markets.
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The Journey of Kia Motors in India
As mentioned earlier in the post, Kia had an exhilarating start in the Indian market and with its launch of first model, KIA Seltos, made them an instant hit among its indian consumers.
They have a single manufacturing plant in Anantpur, Andhra pradesh and has invested over 1 billion dollar to strengthen the brand’s position and cater to the rising automotive demand.
According to the latest information, Kia Motors had crossed the sales of over 1 lakhs cars in India that helped them becoming the first-ever international car manufacturer to do so. It is also interesting to note that, Kia motors is minorly owned by Hyundai Motor corporation with approximately 33.38% of equity shares.
Key Facts on Kia Motors
|1944 in South Korea
|Founders Or Parent Company
|Hyundai Motor Group
|Seoul, South Korea
|Number of locations
|Over 330+ Dealers in India
|SUV, Sedans, Electric Cars, etc.
|₩ 69.86 trillion (2021)
How Much Does A Kia Dealership Cost in India?
The dealership cost or Total Initial investment cost for Kia Motors will depend on the chosen dealership model, city, available floor area, and initial stocking capacity of the applicant.
Nonetheless, To become an approved Kia Motors Dealer, one would at least require an initial investment ranging from ₹5 Crore to ₹ 10 Crores for Authorised main dealer with a floor area of min. 3000 sq. ft.
The above-mentioned initial investment for Kia Motors business does cover the expenses or fees such as Brand deposit fees, Marketing Fees, Interior setup, Marketing, Initial stock, and other necessary expenses.
Additionally, The interested prospects should have an adequate amount of space for Spare parts, Vehicle servicing area, customer’s waiting hall with proper amenities, and other necessary stuffs.
What are the investment involved in setting up a Kia Motors Dealership?
There are several things involved in setting up an automotive showroom in India, which may include costs like rent, employee salary, showroom construction expenses, initial stock of Vehicle and spare parts, and other miscellaneous expenses.
|Type of Cost
|Cost and Other details
|Brand Deposit Fee
|Approx. ₹ 20 lakh – 30 lakh
|Min. 45 ft
|Min. 3000 sq feet
|Min. 3000-4000 sq feet
|Spare Parts Area
|400 -500 sq feet
|Interior setup cost
|₹40 lakh – ₹45 lakh
|₹4 Crore to ₹ 7 Crore
|Min. 50 lakhs
|Initial Working Capital
|~ Approx. 1 Crores
|Total Initial Investment
|₹ 5 Crores – 10 Crores
It is also important to note that, While the total initial investment may comes around ~ ₹10 Crores, but majority of investment goes into the initial stocks. and it will be quite difficult to maintain or run these outlets with a limited investment or without a proper liquidity backup.
We would also like to inform you that, we haven’t included the cost of land to setup the showroom in India. One should conduct a comprehensive survey and market research before opening an unit.
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How Much is the Kia Motors Dealership Profit Margin?
It could be certainly difficult to quote a certain percentage of profit margin for a Kia Motors dealers.
Furthermore, the profit margin of any specific automotive outlet depends on several factors, including the location, average customer footfall, market potential, and the dealers capabilities to understand and run a particular chain.
To make your research easier, we’ll do our best to post an approximate number so you can clearly understand it.
|Sources and details
|Cost and its details
|Number of automotive sales/year in 2020
|Number of dealers
|Average number of Car sold by single dealer
|Starting pricing for Kia SONET, on-road
|~ Approx. 11 lakhs
|₹ 44 Crore
|Estimated net profit margin(5%)
|Estimated net profit margin(1%)
|₹44 Lakh (Annually)
|Estimated net profit margin
|Approx. 40 lacs to 2 Crore
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Sales growth prospects for KIA MOTORS in India
Well, the picture speaks everything about the chain. KIA India, a subsidiary unit of KIA Incorporation has been growing extensively in Indian market. In February 2023, The chain has reported a sales of over 24,600 cars in India. It is also helping the chain to acquire a significant market share in automotive industry.
What will be the revenue streams for KIA Dealership?
For an authorized KIA dealers, it provides a multiple source of revenue streams and profit margin may vary depending on the product you sale.
Some of the major source of income for a dealers are listed below;
- Sales revenue – Varies from 1-5% on each sales(Actual figures are undisclosed).
- Vehicle Insurance – Around 4-7%
- Spare Parts – 15-25% on MRP
- Usual servicing – 10-20%
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How to Get KIA Dealership?
Starting a KIA Dealership Showroom will require a relatively enormous investment that may offer an impressive gross relatively better margin. Additionally, the KIA chain may provide several benefits, and interested candidates can take up its outlets in their city through their expertise and endless support systems.
One can avail this franchise using below mentioned steps;
- Visit its official website and fill in the necessary details, such as Name, Email ID, Phone number, Contact preference, and other required stuffs.
- Or, you can call them at – 1800-108-5000 Or Email: firstname.lastname@example.org
Final Takeaway – Conclusion
Kia is one of India’s leading automotive manufacturers, offering a wide range of premium and high-end products. Its renowned product range, includes, Sedan, SUV, Electric cars, and more.
The chain has foray into the Indian market with a single unit manufacturing plant in Andhra Pradesh, which has capabilities to product 300,000 vehicles per year.
To become an authorized KIA Motors dealer, one should buckle up to make an investment of at least ₹5 crores to ₹ 10 crores with a floor area of min 3000 sq ft and store frontage of 50 ft.
The franchise has not disclosed its profit margin of its existing dealers. However, as per industry estimate, one should be capable of earning over 50 lakhs annually.
The Final Thought – Overall, KIA Motors is a respected, reputed, and well-established brand in India with more than 330+ dealers present across the country.
With more room for outlet’s expansion and new launches, KIA is well-positioned to continue its extraordinary growth and expansion journey in the coming years.
If you are passionate about Automobile industry and ready with its initial investment ask, you are set to go with Kia Dealership Journey. Don’t forget to leverage the KIA’s extraordinary growth and training systems.
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How much does KIA motors dealership cost in India?
Ans: The average cost required to become a KIA Motors channel partner may range between ₹5 Crores to ₹ 10 Crores with a floor area of min 3000 sq feet. The outlet frontage should be at least 40-50 ft.
Is KIA Dealership Profitable in India?
Ans: As a KIA Dealers, you may leverage brand’s established and proven business setup. However, the profit margin for its respective outlets are not disclosed by the franchise.
Nevertheless, According to the popular AutoCar Magazine, KIA India has report an impressive sales of over 24000 car in February and its market share has increased quite significantly.
How to Apply for Kia Dealership?
Ans: One should be well-aware of the cost and other expenses before applying for its dealership. If you are ready with the initial ask, one can directly visit its official website or call them at – 1800-108-5000 Or Email: email@example.com.