Daewoo, a South Korean conglomerate, was founded in 1967 and has since become a significant player in various industries, including automotive, shipbuilding, and electronics. Originally established as Daewoo Industrial, the company rapidly expanded its operations, diversifying into multiple sectors. By the late 1990s, Daewoo was recognized as one of South Korea’s largest chaebols (business conglomerates), renowned for its innovative products and aggressive marketing strategies.
In the automotive sector, Daewoo produced a range of vehicles, including sedans, trucks, and buses, gaining international presence through exports. The company was known for models like the Daewoo Matiz and Daewoo Nubira, which appealed to consumers with their affordability and features.
In a recent interview, Abdullah interacted with H.S. Bhatia, Managing Director and Manufacturing Partner, Daewoo India, in which he discussed about types of electric vehicles that Daewoo planning to introduce to the Indian market, Daewoo plan to address the challenges of the EV infrastructure in India, or innovations Daewoo is planning for the EV segment in India, the specific needs and preferences of its Indian consumers.
Could you tell us a little about what Daewoo will give to India and what the firm is all about?
Daewoo, as you know, is a 50-year-old brand from South Korea with a rich legacy and heritage, and it is present in many segments of the industry. Daewoo is part of the Posco group, which is one of the top five conglomerates in South Korea, valued at $750 billion. Posco is largely involved in steel, shipbuilding, construction, and various other categories. Daewoo is one of the brands under Posco, and it has a global presence, currently operating in about 110 countries.
As I mentioned, Daewoo has a 50-year legacy and made the strategic decision to enter India about two years ago, considering India’s economic growth and the rising income levels, which contribute to aspirations for a better lifestyle. With India’s growing economy, Daewoo aimed to be a part of this growth, which is what brings the brand to India.
What sorts of electric vehicles do you believe Daewoo plans to bring to the Indian market?
Daewoo India is planning to enter the two-wheeler market, which includes electric cycles, scooters, and bikes. Our mandate is to establish a presence in the electric vehicle (EV) two-wheeler space, which is experiencing rapid growth. Last year, less than 1 million electric two-wheelers were sold, and the market is projected to expand significantly. By 2030, the Government of India has set a target for 50% of all two-wheelers to be electric, translating to approximately 10 million electric scooters sold by that year. In 2022, only about 500,000 electric two-wheelers were sold throughout the entire year, but this number rose to 900,000 last year, representing a growth of nearly 80%. We anticipate that the market will grow tenfold over the next six to seven years.
Given this rapid expansion, many players are eager to establish themselves in this burgeoning industry, which is where Daewoo comes into the picture. We believe that Indian consumers will benefit not only from the cost savings associated with lower running and maintenance expenses compared to internal combustion engine (ICE) two-wheelers, but also from the positive environmental impact of switching to electric. Thus, our approach has a dual objective: to offer affordable pricing while also facilitating the necessary ecosystem, including charging stations and other factors that influence a consumer’s decision to purchase a two-wheeler. This effort is supported by favorable government policies and initiatives.
As a result, we are witnessing substantial growth in this category. There are many players in the market; however, in recent times, we have observed significant consolidation, with many fly-by-night operators exiting the industry. Now, serious players are making concerted efforts to advance this category, and we view it as an incredibly exciting space.
How does Daewoo intend to handle the problems facing India’s EV infrastructure?
I would like to address the challenges of electric vehicle (EV) adoption in the industry and the country as a whole. One significant barrier holding back the growth of two-wheeler EVs is the lack of charging infrastructure. When you have a vehicle and plan to travel a distance, there’s concern about charging availability; unlike petrol stations, where you can refuel every few kilometers, EV users often worry about finding charging stations along their route. This is a major issue, prompting both the private sector and the government of India to work on various improvements in charging infrastructure. These efforts include financial incentives, mandates for charging stations at petrol or CNG pumps, and requirements for their availability in residential colonies and condominiums, as well as in office complexes. Additionally, the growth of battery swapping infrastructure has attracted numerous private players, leading to significant advancements in charging facilities.
Thus, improving charging infrastructure remains the top priority for both users and the government; without it, faster EV adoption could be hindered.
The second area of focus is ensuring battery safety and overall vehicle safety. In recent years, we have witnessed several issues related to battery performance, including explosions and other safety concerns. With major players entering the market and the use of more affordable lithium batteries, whether from China or India, it is crucial to address safety concerns. Once safety is assured, consumer confidence will grow, further accelerating adoption rates.
The third factor is pricing. There is considerable government support through incentives, such as Production-Linked Incentives (PLI) and FAME subsidies. These incentives include central government support for production and state-level incentives for registration. For instance, states may offer a subsidy of ₹10,000 for EV registration or provide exemptions on registration fees.
In summary, these three factors—charging infrastructure, pricing support through incentives and subsidies, and safety improvements—are currently impacting EV adoption. If private players, state governments, and the central government work together to enhance these areas, we can significantly increase EV adoption rates. Daewoo is actively collaborating with all these stakeholders to overcome these challenges and accelerate the growth of two-wheeler EV sales.
Are there any specific models or advancements that Daewoo has planned for the Indian EV segment?
So, we have discussed the ecosystem. Now, coming to specific technology, the EV segment is undergoing significant changes. In the battery space, there is a lot of work happening with various technologies. While lithium batteries are prevalent, many companies are exploring alternatives such as aluminum, hydrogen, and nickel carbide. This is a global R&D effort, and Korea is particularly strong in lithium technology.
On the vehicle side, considerable advancements are being made regarding mileage per charge, battery life, and additional features. Currently, we are all focused on these areas, and Daewoo is certainly involved in this effort. This is why we have not finalized our models yet; it will be another year or so before we launch and announce them, as there is still significant work in progress on both the technology and R&D fronts.
How do you believe Daewoo will guarantee that its automobiles satisfy the particular demands and tastes of Indian customers?
I believe that when it comes to Indian consumers, especially for products priced at ₹50,000 and above, trust in the brand is crucial, alongside technology—which, as I mentioned, is a work in progress. Customers seek reassurance that when they invest in a product worth this amount, it comes from a reliable brand with a solid reputation. This trust factor stems from the brand itself, the product, the underlying technology, and the manufacturer’s background.
The first thing Daewoo can offer Indian consumers is this trust factor, as we are a brand with a 50-year legacy, supported by global technology and a commitment to innovation. Therefore, the trust we provide is paramount.
The second aspect is our sales and service network. Customers want to know about the availability of dealers in their cities and the quality of service they can expect. They consider warranty terms and the availability of components when making a decision about a brand. Thus, our efforts in establishing a strong sales and service network are essential.
Finally, marketing our product plays a vital role. It’s about how we engage with customers, instilling confidence and awareness of our products and technology. We are actively working on these factors—trust, network, and effective marketing—to ensure that once our products are ready, consumers feel confident in choosing Daewoo.
How does Daewoo intend to align with the Indian government’s initiatives on electrification and sustainability?
As I mentioned, there is a significant amount of work occurring at both the private and government levels. In the last session, we had an interim budget due to elections, which resulted in a four-month budget allocation of Rs.500 crores for the period following the budget presented in February. This Rs.500 crores for the FAME scheme was only intended for that four-month period.
As an industry representative, I speak on behalf of the entire sector, and what we need is continuity and confidence from the government to enable players to invest in this category, whether in research and development or manufacturing. We are seeking reliability and consistency in government policies. Therefore, our request and suggestion to the government is that, for electric vehicles, we need a comprehensive plan. Since this is still a growing category and has not yet matured, there are significant challenges regarding consumer adoption, as well as issues related to manufacturing investment.
We need a five-year plan, as a one-year plan does not provide sufficient confidence for manufacturers. Without long-term policies that ensure consistency and continuity, manufacturers will hesitate to invest in R&D or manufacturing setups in India. We expect the government to provide encouragement through budgetary support, not only for manufacturers but also for increasing infrastructure support for charging stations and other essential factors. If the government implements the right policies, I believe the target of achieving 50% of two-wheeler sales as electric vehicles by 2030 is attainable. This goal applies not only to two-wheelers but also to passenger cars and commercial vehicles, all of which have been assigned targets. I think this is a fair target, and with government support, we can realistically achieve these numbers.
