Kia India To Focus On Rural Markets In 2025 The car maker is looking at 20 per cent year-on-year growth in India

In 2024, Kia India reported its highest-ever annual sales delivering a total of 2,55,038 units, marking a 6 per cent year-on-year growth compared to 2023. In 2025, it has a target to reach 3,00,000 units and the rural market would be its prime focus area for the year. "We are looking at an overall 20 per cent growth. Our aim is to expand into the rural market as the region is growing. We are present in 300 cities with about 700 touch points and we want to add another 100 towns by the end of 2025," Hardeep Singh Brar, senior VP and head of sales and marketing at Kia India, told Entrepreneur India.

Kia recently launched the Syros SUV in India and is planning to launch the mass market electric vehicle (EV) in the second half of this year. "We are launching the mass market EV this year and next year we will have another EV in the portfolio. These new launches will help us in achieving our targets," he added.

The company has covered Tier I and Tier II cities. The focus has now shifted to Tier IV and beyond. "For us, smaller towns have always been a bigger bet. Tier IV in India is our next target. It's a long way to go, we will catch up every year. There is a lot of investment which is going into the market, all the roads which are coming up are through rural areas. The government has a lot of focus on these pockets and the rural economy is growing. For people in rural pockets, cars are an aspirational product. So, they're very particular about the product and we want to be closer to such customers," Brar said.

Kia India's primary manufacturing facility is located in Anantapur, Andhra Pradesh, with an annual production capacity of 300,000 units, and the company has expanded this to 350,000 units. Although the target is set at a 20 per cent growth, the car maker is flexible in its approach. "Our production targets will be based on demands. We have the capacity to increase the production based on the requirement," he explained.

The company's growth will be on the back of a balanced production between its Internal Combustion Engine (ICE) range and EVs. In India, the push towards EV is mostly to reduce dependence on the import of crude oil. Currently, EVs are taxed at 5 per cent. The average growth rate of the automotive industry is trailing behind the GDP. The average GDP growth rate is about 7 per cent and that of the auto industry is about 5 per cent. The disparity in average growth in per capita income, regulations around cars often affect the prices. "Regulations around safety and exorbitant taxes often lead car prices to go much higher. India has one of the highest taxes in the world. So, if the government can look at rationalizing the taxes on the cars, I think the affordability will increase. This would make cars accessible and with every car that gets sold, the employment generation rate is much higher in this industry," he said.

Asked about what makes him bullish about EV penetration in the country, despite the slow growth rate, he said, "When the price disparity between ICE and EV cars comes down to as much as 20 per cent, the industry will reach an inflection point. This would happen with the improvement in battery technology." The current price difference between EVs and ICE cars stands at 30-50 per cent. The high acquisition cost of an EV is one of the biggest challenges behind its low penetration of 2 per cent in the country. Furthermore, better EV infrastructure is required to improve its penetration in smaller pockets. "Once range anxiety is taken care of, we will see better reach across the country," he concluded.

The comapny announced up to 3 per cent price hike across its entire lineup. The price hike, effective from April 1^st, 2025, is primarily due to rising commodity prices and escalating supply chain-related costs.