The Indian automobile industry is seeing a rising demand for SUVs. The desire to own bigger cars has caught on in rural areas as well. This has resulted in a slew of SUV launches.
Kia India, which boasts 10-12 per cent of its sales from the rural markets is expanding its reach among rural customers. The car maker, which recently launched the spacious Carens Clavis, is expecting a 6 per cent overall growth in CY25. businessline spoke to Hardeep Singh Brar, National Head of Marketing & Sales, Kia India, on the growth plans, introduction of its electric vehicle, rural growth and increase in exports. Edited excerpts:
What will be the growth projection for Kia India in CY25?
Last year, we sold nearly 2,50,000 units. This year, we plan to reach about 300,000 units, targeting roughly 6 per cent growth. Additionally, we aim to increase our market share by 1 per cent, bringing it to approximately 7 per cent by year-end.
Companies across sectors have pointed to a slowdown in urban areas. How do you see the Indian automobile market in CY25?
Yes, there’s an urban slowdown. Rural markets are growing faster, partly because urban infrastructure (like roads) isn’t keeping pace. We expect the industry to grow 2–3 per cent this year. Growth in the first four months has been 3 per cent, and we expect this to continue.
With rural areas outperforming urban areas, has Kia India’s sales seen a demand uptick? What percentage of the company’s sales are from rural areas?
Rural markets account for about 10-12 per cent of our sales, with the majority (85-90 per cent) coming from urban areas. However, we are gradually expanding into rural areas as more rural customers aspire to own larger vehicles, like SUVs. This growing interest in bigger cars presents a promising opportunity for us to tap into and increase our presence in these markets.
What is the plan to ramp up presence?
We are focusing on expanding into smaller markets, as they offer stronger growth potential compared to larger towns, which are becoming stagnant. Currently, we have around 490 showrooms and aim to reach 500 by year-end. Additionally, we plan to broaden our presence from 300 cities to about 350 cities, significantly increasing our market footprint this year.
With the new launches, will Kia India ramp up capacity?
This year, we aim to sell 300,000 units domestically and 25,000–30,000 units for exports. Our current facility can handle up to 400,000 units, ensuring sufficient capacity to meet both domestic and international demand without strain.
You have earlier spoken of the price parity between electric vehicles and internal combustion engine (ICE) vehicles. With battery prices declining, how do you foresee the prices?
Yes, we anticipate the price gap between petrol/diesel vehicles, and electric vehicles will continue to narrow as battery prices fall. We are still finalising the EV pricing details; we will share the same on the launch.
When will Kia launch the Clavis EV, a mass market EV?
The Clavis EV will be announced soon. It will be the first seven-seater EV in the market, and customers are highly anticipating it.
What consequences do you see for the Indian automobile industry with tariffs and geopolitical tensions?
There was uncertainty when tariffs were announced, but they’re paused for 90 days. India is in a better position compared to the rest of the world, especially compared to China. Inflation is under control, rate cuts (0.5 per cent) are positive, and tax rationalisation in the last Budget is another positive. Layoffs seem to be behind, but hiring hasn’t picked up yet. Moreover, rural demand is strong, and a good monsoon is expected, making the outlook positive.
What new geographies is KIA India looking to ramp up exports from India?
We currently export to 100 countries and have a strong presence. We plan to strengthen its position further, especially in right-hand-drive markets.
