High car taxes in India could stall sales and growth

In this episode of the State of the Economy podcast, S Ronendra Singh talks to Hardeep Singh Brar, senior VP, Marketing & Sales, Kia India , to discuss the outlook for the automobile industry in 2024 and beyond. The conversation explores the challenges and opportunities within the sector, including the impact of government investments, layoffs, and the unpredictable weather patterns on the industry’s growth. Brar reflects on the current year, describing it as average in terms of growth due to a lack of investment and certain market challenges.

However, he forecasts a more positive outlook for 2025, with growth expected between 5-10% driven by increased government investment, a rebound in the labour market, and more favorable monsoon conditions. The discussion also delves into the strong performance of the SUV segment, which has grown significantly over the past few years, and how this trend is expected to continue into 2025. In contrast, the sales of hatchbacks and sedans are declining, as consumers increasingly opt for more versatile and spacious SUVs.



Despite some progress, the EV segment remains relatively small, making up only around 2% of the market. Brar advocates for continued subsidies at both the central and state levels to stimulate long-term growth in the EV sector. He also highlights the importance of state policies, noting how tax incentives have had a significant impact on EV sales in some regions.

Finally, the conversation concludes with a look at the future of alternative fuels, particularly flex-fuel vehicles and hydrogen fuel cells. Brar emphasises the need for a focused approach, urging the industry to prioritise the development of EVs before exploring other alternatives like hydrogen-powered vehicles. (Host: S Ronendra Singh ; Producer: Amitha Rajkumar) About the State of the Economy podcast India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world.

But several sectors continue to stutter even as others seem set to fire on all cylinders. Comments.