This carmaker among a dozen to be excluded from govt's Auto PLI scheme

The Indian government has decided to exclude a dozen companies from its Production Linked Incentive (PLI) scheme for automobiles and auto components. One major name among the companies that will be excluded is Kia. According to a LiveMint report, the South Korean automaker will be excluded from the Auto PLI scheme due to a lag in investments. Auto PLI is an ambitious initiative of the Indian government with an outlay of ₹26,000 crore to boost indigenous automobile manufacturing. Kia's exclusion from the Auto PLI scheme will result in the carmaker losing bank guarantees worth ₹1-2 crore.

The Auto PLI scheme was launched in 2021 to boost local manufacturing of automobiles and auto components in India. The auto industry players in India committed more than ₹75,000 crore for the same under the Auto PLI scheme. However, at least 12 companies including Kia, that was enlisted under the scheme as a champion OEM, failed to make the committed investment, which resulted in the exclusion of these firms from the scheme, reported LiveMint.

Under the Auto PLI scheme, the government aimed at building a comprehensive ecosystem for the auto sector, which included not only building physical assets but also investments in research and development (R&D). The report has stated that in FY24, the first year of claims, the auto industry had sought a mere ₹500 crore in investments, which is a tepid response considering the scheme has an outlay of about ₹26,000 crore across five years.

Kia has not said anything officially so far about its exclusions from the Auto PLI scheme. However, the lack of investments could be because of a change in strategy or investment plans. The automaker currently holds a strong position in the country's utility vehicle market with its offerings such as Seltos, Sonet, Carens and the recently launched Syros. It also sells the Kia Carnival premium MPV. Besides that, the car manufacturer has two electric vehicles on sale in India, which are the EV9 and EV6. Kia is also expected to bring the Carens EV, EV6 facelift to India in near future to strengthen its portfolio in the country.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.