Kia India MD Gwanggu Lee Discusses the Impact of Rising Car Prices on Demand

NEW DELHI: Kia India's Managing Director, Gwanggu Lee, has highlighted the challenges faced by mass consumers due to the significant increase in car prices over the past few years. Lee stated that car prices have risen by 35-50% due to safety and emissions mandates, making it difficult for many to afford a vehicle. He anticipates moderate growth of 3-4% in car sales for the coming year.

To stimulate demand, Lee suggested that the government could consider reducing taxes on cars, which are currently at over 45% for mid-sized and larger vehicles, and over 28% for smaller cars under 4 meters. Kia India is also preparing to launch affordable electric vehicles and other mainstream cars, acknowledging the disparity between rising car prices and stagnant middle-class incomes.

In an effort to boost demand in the competitive entry SUV market, Kia introduced the new Syros mini off-roader, which will join the Sonet model. The Syros, available with a 1-litre petrol engine and a 1.5-litre diesel, will also be offered in an electric version within the next year. Despite the crowded segment, featuring formidable models like Maruti Brezza, Tata Punch, Hyundai Venue, and Mahindra 3XO, Kia India remains confident in its challenger spirit and product portfolio.

Kia India expects to sell nearly 260,000 units this year and aims for 300,000 unit sales next year. Lee emphasized that India remains one of the most promising markets globally for the company, given its status as one of the fastest-growing economies. He also urged the government not to alter the duty benefits currently given to electric vehicles, which are taxed at 5%, to maintain their affordability.