Kia India Developing CNG and Hybrid Vehicles for Market Launch

Kia India announced recently that it is actively developing CNG and alternative powertrain options, including hybrid and flex-fuel technologies, for the Indian market. The company plans to launch these options at an appropriate time while advocating for a reduction in vehicle taxes, including GST, which currently account for 65% of a vehicle's cost borne by customers.

“We are studying different powertrain options – hybrid, CNG, flex fuel – at our R&D centre. We will disclose details at the appropriate time. Even though CNG and hybrids are growing, their market share is still limited. We need to align our engine options accordingly,” said Joonsu Cho, Chief Sales Officer, Kia India.

Highlighting the high tax regime, Hardeep Singh Brar, Senior Vice President, Sales and Marketing, Kia India, stated that cars in India are significantly more expensive compared to other countries due to higher taxes. “We have GST of 48% on almost all cars, and nearly 65% of a car’s cost goes into taxes. Tax rationalization is much needed. The average growth rate of the car industry is about 5%, while GDP growth is much higher. When comparing car prices globally, Indian prices are higher,” Brar explained.

Sources indicate that the GST on old and used electric vehicles (EVs) is expected to rise, and a proposal to lower GST rates on parts and components might be rejected again. Currently, the GST on new EVs is 5%, while old and used EVs are taxed at 12%. Parts and services for repair or maintenance of second-hand vehicles attract an 18% GST. The GST Council is set to meet on Saturday in Jaisalmer, Rajasthan, to discuss these proposals.

In a related development, Kia India unveiled its sub-four-meter SUV, the Syros, which features a 1.0-liter turbo petrol engine producing 88.3 kW (120PS) and 172Nm, as well as a 1.5-liter CRDi diesel engine delivering 85 kW (116PS) and 250Nm. Bookings for the Syros will open on January 3, with deliveries starting in February.

The compact and mid-SUV market in India is expected to sell around 14 lakh units this year, with projections of 15-16 lakh units next year. With the Syros launch, Kia India aims to increase its market share in these segments to 20% next year, up from the current 15%, Brar added.

HBL