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Sentiments, High Import Duties Companies (NBFC) Sector

Boston Kars, an electric vehicle company based in the US, faces several challenges in entering the Indian market, such as expensive infrastructure costs and high import duties. However, India's growing electric vehicle policies and commitments to build charging stations make it an attractive future market. To succeed, Boston Kars should establish a local assembly unit through a joint venture and customize its vehicles and financing options for Indian customers while controlling costs through a configure-to-order model. While India's economy and auto industry remain large, luxury vehicle sales and overall car sales declined in 2019 due to increased competition and tightened credit.

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Surbhi Sabharwal
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39 views

Sentiments, High Import Duties Companies (NBFC) Sector

Boston Kars, an electric vehicle company based in the US, faces several challenges in entering the Indian market, such as expensive infrastructure costs and high import duties. However, India's growing electric vehicle policies and commitments to build charging stations make it an attractive future market. To succeed, Boston Kars should establish a local assembly unit through a joint venture and customize its vehicles and financing options for Indian customers while controlling costs through a configure-to-order model. While India's economy and auto industry remain large, luxury vehicle sales and overall car sales declined in 2019 due to increased competition and tightened credit.

Uploaded by

Surbhi Sabharwal
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Boston Kars (‘the company’) - a US company pioneering The government is also coming up with various favourable policies to promote

to promote electric mobility


made-to-order electric car models with technological in the country such as National Electric Mobility Mission Plan 2020 and Faster Adoption and
innovations including batteries and charging equipments, Manufacturing of Hybrid and Electric Vehicles (FAME)
competes in luxury segment and is having manufacturing
EESL and BESCOM have committed to setup charging stations in India by December having
units in US and China
major stations in Delhi and Bangalore

Challenges: MARKETING and INNOVATION STRATEGY:


 ENTRY MODE:
 expensive infrastructure and resource cost for EVs Joint Venture (JV) with an Indian company in order to achieve effective cost in terms of
 Multiple shocks – GST, decreased consumer resources such as skilled labour and infrastructural costs give advantage to the company to
sentiments, high import duties gain trust over the target customers.
 Tightened liquidity in non-banking financial  PRODUCT AND SERVICE PORTFOLIO:
companies (NBFC) sector The company can tweak the current model of Rear Wheel Drive Standard Range Plus as
 High import duties on luxury segment cars per the Indian market as a first product to introduce in the country as it will edge over the
FWD cars of other competitors in the market. Also, in service portfolio, along with current
Still, India is projected to emerge as the third-largest services, the company should also focus on providing better finance options to the
automotive market for volume by 2026 customers
THE DECREASE IN LUXURY SEGMENT AND INCREASE IN  OPERATIONS STRATEGY :
SALES OF SEMI-LUXURY BRANDS : - Setup an Assembly unit in SEZ area in India to attract less taxes and duties
- Import completely knockdown EVs at less import duty rates and assemble in India
In 2019, the sales of luxury segment cars reduced by - Developing a market in Delhi, Bangalore and Hyderabad
15%, majorly due to entry of new players offering semi - Use Configure to Order: When there is no customer in the system, semi-finished products
luxury cars with tech innovations such as Kia and MG will be completed based on the MTS strategy and finished products will be sent to a
who have beaten the country’s top car brand Maruti warehouse. When an order will come in for customization, a semi-finished product will get
Suzuki in last 12 months assigned to that order and this MTO job starts to complete the semi-finished product. The
customization will be offered on non-core components, which will be sourced locally from
THE DUTIES AND TAXES
The GST rate on EVs reduced to 5 per cent from 12 per
cent and Import duties on SKD electric cars is increased
to 30% and CKD EVs is up to 15%
THE GDP AND CAR SALE:
The auto industry contributes 7.5 percent of India’s GDP.
However, despite increase in the GDP Current Prices and
also the private consumption expenditure of the
consumers still the car sales in India in lately in 2019 have
not seen a major growth and have decreased in
comparison to previous years. Further, the consumer
confidence can be seen to be decreasing from Mid 2019

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