NEW DELHI: With car prices going up between 35-50% over the past 3-4 years, owing to safety and emissions mandates, affording a vehicle has become difficult for mass consumers and sales are likely to see a moderate growth of 3-4% in the coming year, Kia India MD Gwanggu Lee said on Thursday.
To generate demand, Lee suggests, govt can look at reducing taxes on cars from the current levels where mid-sized cars and bigger ones have a GST rate of over 45%, while smaller ones (under 4-meters) are taxed at over 28%.
As the company prepares to launch affordable EVs as well as other mainstream cars, Lee said that the increase in car prices came at a time when incomes for many middle-class users did not go up at the same pace.
As part of its strategy to perk up demand in the volume-laden entry SUV market, Kia drove in the all-new Syros mini offroader, which will stand besides its Sonet model, also an under 4-meter car.
Lee said that the boxy Syros, which will come with a 1-litre petrol engine and a 1.5-litre diesel, will also be offered with an electric version over the next one year. The company has developed the new vehicle after taking into account the customer preferences here, something it also did during the development of the Seltos and Sonet SUVs and the Carens MPV.
But while the company expects to generate healthy volumes from the new model, whose price will be revealed at a later date, the Syros also comes in a segment that is crowded. Formidable models include Maruti Brezza, Tata Punch, Hyundai Venue, and Mahindra 3XO.
“Kia India has always been driven by a challenger spirit… With the Syros, we are further enhancing our product portfolio, and are confident of taking on the competition,” Lee told TOI.
Kia India expects to sell nearly 2.6 lakh units this year, and Lee said the company is looking at 3-lakh unit sales next year. Despite the slowdown pangs, the Kia MD said that India still remains “one of the most promising markets” for the company globally. “The country is still amongst the fastest-growing economies of the world, promising a lot for carmakers.”
Lee also said that the govt should not tamper with the duty benefits given to electrics, which currently are taxed at 5%. A lower duty makes them affordable, or else the prices may be higher. “Without any tax incentive from govt, it will be very difficult.”
