No plan to hike Kona EV prices, despite proposed custom duty hike: Hyundai

Hyundai Kona. Photo: Sanjay K Sharma

Hyundai Motor India is not planning to hike prices of electric model Kona, despite expectations of a rise in the cost of the vehicle with the government proposing to increase customs duty on imported EVs, a top company official said.

The automaker, which is looking to drive in a mass market electric vehicle (EV) over the next two-three years, said it will look to increase localisation to keep the price of the model under check to offset impact of increased customs duty.

"Currently we are are importing some parts of the Kona Electric from South Korea. As per the new Budget announcement, the import duty will go up by 5 per cent... We understand the government's push is towards Make in India so we will do more towards localisation of the product here," Hyundai Motor India (HMIL) Managing Director and CEO SS Kim told PTI.

He admitted that the import duty increase will lead to rise in cost of the vehicle but "we will not pass it over to the customer and try to mitigate the impact by localising more and optimising our processes".

Kona Electric is currently priced at Rs 23.71 lakh (ex-showroom Delhi).

As announced in Budget 2020-21, import duties on fully imported commercial EVs will go up to 40 per cent from 25 per cent, while the same on semi knocked-down electric passenger vehicles will go up to 30 per cent from 15 per cent.

Import of completely knocked-down units of electric vehicles will attract import duty of 15 per cent, up from 10 per cent earlier. These changes come into effect from April 1.

When asked about localisation level of the vehicle, Kim said, "Localisation is not very high, but for all other products which would be coming later, we are looking at over 90 per cent of localisation. For Kona the volumes are small right now and we are importing a lot of battery components from South Korea."

He said HMIL is making some plastic and interior parts in India, but batteries are being imported.

Commenting on the company's progress on mass market EV, he said: "We are working to develop mass medium EV, which would be launched in next two-three years... We are contacting suppliers, and various technologies companies to set up EV ecosystem in the country and our mass market EV and it will come with very high local content."

Kim said Hyundai is looking for partnership with various companies for battery manufacturing.

When asked about sales prospects for the year, Kim said, "We are cautiously optimistic, we are looking at low single digit growth... The first half will be flat, but in the second half expect there could be single low dight growth."

On new product plans, he said the company is studying the feasibility of products such as seven-seater Creta, micro SUV. "We are studying various options for MPV as well."

When asked if Hyundai was planning a fresh round of investments in India keeping in minds its plans here, Kim said, "we are preparing some future plans", without disclosing details.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel