New Kia Sonet to have better resale value than older model: Here’s why

A recent Total Cost of Ownership (TCO) analysis done by global research and consulting firm, Frost & Sullivan, states that the Kia Sonet compact SUV is one of the most cost-efficient vehicles to own in its segment. The TCO report has been prepared on parameters based on a typical 5 year and 50,000 km ownership. The analysis accounted for three key pillars of TCO, known as Acquisition cost (downpayment, EMI, insurance), Operational Cost (fuel cost, part cost, service labour cost) and Residual Value (resale value post 5 years).

Based on the above parameters the Sonet was pitted against five competing petrol models in its segment and three diesel models.Here are the results of the TCO analysis.
Sonet Diesel analysis result:
• Sonet has the best TCO in its segment.
• Sonet is second best in terms of acquisition cost.
• Sonet has best in segment insurance and finance cost.
• Sonet offers lowest fuel cost over 50,000 km.
Sonet Petrol analysis result:
• Sonet has the second best TCO in its segment.
• Sonet is third best in terms of acquisition cost.
• Sonet is third best in terms of insurance and finance cost.
• Sonet offers third best fuel cost over 50,000 km.
Overall TCO analysis results:
• The Sonet Diesel and Petrol came up to be the best in segment in terms of maintenance cost.
• Sonet Diesel is best in its segment with lowest TCO.
• TCO of Sonet Petrol is lower than Industry average and second best in its segment.

While the results are largely in favour of the Kia Sonet, as a value-for-money package in both petrol and diesel options, Kia India is days away from unveiling the new generation of its Sonet SUV, which is bound to affect the result of this analysis. In a recent media roundtable, Hardeep Singh Brar, Vice President & Head of Marketing & Sales, Kia India, said that while parameters such as fuel cost and maintenance cost will likely remain unchanged, the acquisition cost can be expected to increase. “Acquisition cost may change but it will also increase residual value, therefore cancelling out the change. No change in other parameters are expected.” He said.

To that tune, the existing Kia Sonet has a 3 percent higher residual value than the segment average in both its petrol and diesel models. However, while the Sonet Diesel may have recorded the best TCO in its segment, the fuel type is being phased out by many automakers and is also being discouraged by the government. When asked, if Kia plans to phase out the diesel engine options from its portfolio, Brar said, “We will change our production strategy as per customer demand, while it has gone slightly down over the past few years, a substantial amount of our customers are still looking for diesel engine option and we intend to fulfil their needs.” Currently, 25 percent of Sonet customers are buying the diesel version while the naturally aspirated and turbocharged petrol engines have around 35 percent model share each.