South Korea’s second-largest automaker Kia Corp. is considering developing a hybrid version of its first Europe-focused model, the Ceed, as a strategic response to intensifying competition in the European market.

According to industry sources on Thursday, Kia, which is under Hyundai Motor Group, recently began work related to developing a hybrid electric vehicle (HEV) version of the Ceed, which is one of its key models for the European market.

If mass produced, the Ceed would become the group’s third region-specific model to adopt an HEV variant following the Telluride in the United States as well as the Creta in India and Southeast Asia.

Sources noted that the development will be relatively swift given that the Ceed is similar in size to the semi-mid-sized Hyundai Avante (Elantra). They cautioned, however, that the project has yet to reach the stage of full-scale production planning.

Launched in 2006 as Kia’s first Europe-dedicated model, the Ceed was introduced as a compact hatchback tailored to the European preference for smaller cars. It is produced at the Žilina plant in Slovakia, which supplies the region.

The Ceed surpassed 100,000 units in annual sales in 2019 and continued strong performance with around 90,000 units sold in 2024, making it Kia’s best-selling model in Europe.

Kia has developed multiple variants of the Ceed thanks to its popularity. The Ceed Sportswagon was introduced in 2007, followed by the more stylish Proceed in 2018 and the crossover sports utility vehicle (SUV) XCeed in 2019. The company also launched a plug-in hybrid electric vehicle (PHEV) version in 2020 to keep pace with Europe’s accelerating green policies.

Kia’s move to add an HEV model to the Ceed lineup is driven by both intensifying market competition and surging demand for hybrids in Europe. Although the European market has traditionally favored diesel and PHEV vehicles, HEV sales are rapidly growing as environmental regulations tighten.

According to the European Automobile Manufacturers’ Association (ACEA), HEVs accounted for 11.9 percent of new car registrations in Europe in 2020 while gasoline accounted for 47.5 percent, diesel 28 percent, PHEVs 5.9 percent, and electric vehicles (EVs) 5.4 percent. However, the share of HEVs more than doubled to 30.9 percent in 2024, accelerating towards gasoline’s 33.3 percent share and far surpassing EVs’ 13.6 percent share of and PHEVs’ 7.1 percent share.

Another key factor is the influx of low-cost Chinese EVs into the European market, which is intensifying competition. Sources noted that Hyundai Motor Group is looking to defend its market share by leveraging its strength in HEVs, an area where it maintains an advantage over many European and Chinese brands.

According to ACEA, Kia and its bigger sibling Hyundai Motor Co. sold 267,234 vehicles in Europe in the first quarter of 2025, securing a combined market share of 7.9 percent. This is down from sales of 278,387 units and an 8.2 percent market share during the same period a year ago.

While Hyundai Motor Group is optimistic that European sales will rebound in the second quarter of 2025 with the rollout of new models such as the Hyundai INSTER (Casper EV) and Kia EV3, the market outlook remains challenging.

The European Union is reportedly considering easing the steep tariffs - up to 45 percent - it has imposed on Chinese EVs since late 2024.

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