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.