The automobile industry, not just in India but globally, is currently in a “very difficult” situation regarding whether to invest in electric or hybrid cars, and the industry must be “well balanced” in its approach on this matter, said Gwanggu Lee, CEO and managing director of Kia India, on Thursday.
In an interview with Business Standard on Thursday, Lee stated that while strong hybrid car sales have seen sizable growth in India in the last few months compared to electric cars, it remains to be seen if this trend will continue.
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He cited the example of the European car market, where electric car sales have declined, forcing certain major carmakers there to incur losses, suffer share price decreases, and change their product portfolio strategy. “We are in a very difficult situation amid 100 years of automobile history. So, we have to be very careful and well balanced,” he stated.
Indicating that Kia’s current focus remains on the electric car market, he mentioned that the company’s first mass-market electric car—scheduled to be launched next year—will be a mid-sized sports utility vehicle (SUV).
Kia’s current electric car portfolio in the country is in the premium range (Rs 60 lakh plus). When asked what price range the company is considering for the mass-market electric car, he replied, “It has not been decided yet. However, it will definitely not be in the range of EV6 and EV9. It will truly be a mass-market product.”
The EV6, which was launched in 2022, is sold at a starting price of Rs 60.96 lakh. Kia on Thursday launched the EV9 and Carnival facelift at a starting price of Rs 1.299 crore and Rs 63.9 lakh, respectively. All are ex-showroom prices.
Regarding the Indian market, Lee mentioned that if the demand for hybrid cars in the country increases further, the company is open to launching a strong hybrid car in India. “Yes, we will do that. But are you ready to say there is no need for electrification in India? We have limited resources. We can either continue to invest in electrification or in the hybrid car segment. If the hybrid car segment cannot guarantee returns, it is not easy to take that decision,” he stated.
“Globally, we have various hybrid models. Our hybrid car sales outside of India are very high. However, we have to see if we bring one of these models to India, will this trend (of high hybrid car sales growth) continue or will electrification (growth in electric car sales) be the big wave in India? Bringing new technology to India would require new investments,” he said.
He mentioned that customers currently have many concerns regarding electric cars and their technology. “For example, people say that an electric car has fewer parts than an internal combustion engine (ICE) car. That is true. But then, what about the battery? What if the customer has to change the battery for some reason, and what will be the cost of that? What is the right resale price of an electric car that is five years old? If an electric car customer has such concerns, it will be very difficult (to grow). It will take time,” he explained.
The company’s volume sales this year are expected to remain at the same level as last year, Lee mentioned. “The output portfolio (car models) got aged. So, it is time to gradually introduce new products (including facelifts). Then the sales will jump to the next level,” he added.
He said Kia’s India supply chain will not be significantly affected by the recent conflict in West Asia. “Our localisation is almost around 80 per cent. Only 20 per cent of the parts are coming through the global supply chain. Therefore, the Indian operations of our company are unlikely to be badly impacted due to this matter,” he mentioned.
First Published: Oct 03 2024 | 9:07 PM IST
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