The country?s second largest passenger carmaker, Hyundai Motor India, has exported more than 1 million cars since it set shop in the country in 1999. Having acquired more than the one-fifth of the passenger car market, Hyundai is now looking at expanding its base in India by penetrating the non-metro cities. In an interview with FE?s Ronojoy Banerjee and Anandita Singh Mankotia, the company?s director for marketing & sales, Arvind Saxena, talked about the challenges ahead for the sector and how the company is gearing up to meet them. Excerpts:
How do you see the current year panning out for the company? Do you think the record sales generated last year can be maintained this year also?
Domestic volumes can be maintained. The market is growing and in the last three months, we have been doing exceptionally well. All indications are good so far, but the concerns are the Bharat Stage-IV norms and hike in interest rates. Even prices of commodities like steel and aluminum are going up. Still, the expectation is that the sector would clock a growth rate of about 10% this year.
Hyundai has a market share of 20.7% in the passenger car segment. Do you see this going up in the next three years?
We would definitely maintain and try to grow our market share. In the next three years, we aim to take it to around 23%.
With demand growing, what is your capacity utilisation? Are you functioning at 100% and facing any kind of crunch in terms of meeting the demand?
We are producing about 600,000 units a year at our two plants in the country. With some kind of balancing, we can add another 30,000 to 40,000 units. I think the capacity is fine for the next few years. There are no plans of putting in any additional investments as of now. However, money is no constraint for us and we will evaluate the situation in two years.
How much do sales in rural areas contribute to the overall sales. How do you see this changing in the years ahead?
About 4-5 years back, rural sales contributed about 19%. But, it is over 30% at present. This indicates that rural markets are growing faster. We find these markets to be lot more stable. Even banks have reached many small markets, therefore, financing has become easier. Instead of opening dealerships in these markets, Hyundai is opening dealership centres to reach out to them. Currently, we have 80 such centres and we will push the number to 130 this calendar year.
If any launches are planned for the current year?
Not really. We have just refreshed i-20 with some new key changes. We may look at upgrading our existing models and I think one needs to go through this phase. We would do fairly well with out current product lines.
Will you look at outsourcing your export specific products like i-20 outside the country due to capacity constraints?
Domestic market is clearly our focus area and if we face a capacity constraint, we would cut down on our exports.
How is the export market?
The European markets constitute almost 55% of our exports. Since we expect a dip there, we plan to explore newer markets like Australia, Vietnam and Russia to maintain high export figures achieved last year.