New Delhi: South Korean carmaker Hyundai Motor India (HMI) is realigning its business strategy with change in the recent market dynamics, changes in consumer preferences and the high cost of environmental and safety compliances.
The maker of the popular Santro which marked its entry into the Indian market in 1998 and became a household name, is now betting big on the SUV style vehicles, which now comprises 41% of the overall passenger vehicle sales in India, up from 2015 when its contribution was only 13.5%.
“We will go where the customer is. And as of now it seems the customer is evolving, they want technology and feature-rich cars,” Tarun Garg, Director (Sales, Marketing, Service), Hyundai Motor India told ETAuto.
“It is important to trace the customer trend 3-4 years before it becomes an actual trend. Today, the first time buyers are moving away from hatchbacks and most of them are moving towards compact SUVs,” he said.
The company which has recently launched its Venue with a mid-life cycle upgrade, said that out of every 3 models of Venue sold globally, 2 are sold in India. Hyundai’s Venue makes sales in over 40 countries, and has reported about 300,000 unit sales in the domestic market, since its launch in May 2019.
Garg noted that in the initial bookings for the 2022 Venue model which amounted to 20,000 units, diesel is getting a strong traction comprising about 35% of the total bookings. For the outgoing model of Venue, diesel comprised just 23% of total volumes.
The maker of the popular Creta SUV in the country also said that while the average age of Hyundai buyers has come down by about four years in the last four years, the number of people willing to spend on cars above INR 10 lakh has gone up.
According to Garg, about 37% Venue customers in India are first time buyers. For Hyundai, about 41% of overall sales comes from vehicles above INR 10 lakh.
The company’s current capacity stands at about 800,000 units.
According to industry sources, the carmaker will bring the facelifted version of its popular Creta model this year.
Hyundai is also one of the few OEMs focused on the sedan segment in the country. The carmaker introduced its Aura sedan in January 2020 and will soon be launching the facelifted version of the Verna. The company’s market share in sedans is higher than overall sedan segment market share in the industry.
Other carmakers like Skoda and Volkswagen have recently launched their Slavia and Virtus sedans respectively in the country.
Strategically moving away from hatchbacks
Owing to increased vehicle costs and compliance to upcoming safety norms, Hyundai discontinued its Santro last month as it became difficult to sustain the profits in the long run.
Similarly, in 2018, the company pulled the plug on its most affordable car of the time- the Eon hatchback. The model was not viable to be compliant to the safety crash norms that were to be launched in October 2019 along with BS-VI norms that were scheduled from April 2020.
Hyundai has clearly shifted its focus from the hatchback segment, which currently comprises about 35% of industry’s overall volumes. The company now offers only two premium hatchback models in the segment, including Grand i10 Nios and Elite i20.
Similarly, country’s largest car maker Maruti Suzuki India Limited (MSIL) recently said that it will not hesitate from discontinuing small cars in India if such cars become unviable to sustain in the domestic market. The development came in response to the expected price increase with the government’s proposal about the mandatory six airbags in cars.
The company sells Alto, S-Presso and WagonR in the entry-level segment.