Hyundai Motor India is gearing up to launch half a dozen models next year, ranging from SUVs to sedans and a hatchback, a move aimed at selling more volumes and winning back market share. From a peak of 19.4% in August, the Korean carmaker’s share has fallen off in the last couple of months to around 18%. The first task is to get to 20% levels; which might not appear ambitious but Hyundai insiders know they are up against formidable competition. Assuming the market grows by 5% to around 3.2 million units in 2020-21, Hyundai would need to sell 6.5 lakh cars. In 2018-19, it sold 5.45 lakh units and between April and October, it has sold 2.94 lakh units. As always, SS Kim, MD & CEO at Hyundai Motor India, was guarded about the new models. Hyundai merely said 2019 had been ‘instrumental’ since three new products were rolled out, helping the carmaker consolidate its position.
“We would like to continue with the same momentum in 2020 by bringing in new products to our customers,” Kim told FE. In the last 22 years, since Hyundai entered India, it has rolled out eight products; the Santro at its peak crossed 15,000 units a month. In contrast, rival Maruti Suzuki has come up with twice the number of models. That’s one reason, analysts say, for Hyundai’s market share not having crossed 20%. Moreover, they believe Hyundai’s service network, after sales services, spare parts availability and resale value probably didn’t match that of its peers.
Rahul Mishra, principal at AT Kearney said customers also probably preferred Maruti cars because they were much more affordable. “With new leadership at Hyundai, there seems to be a change in the strategy on how to approach the market. Probably introducing more products and being more visible is one part of it,” Mishra said. Kim took over as the company’s MD & CEO in November 2018 and is known to be aggressive with product launches and network expansion. Hyundai has done well financially on the back of a rich model mix and good realisations. Profits expanded by 21.5% to `2,582 crore in FY19 while revenues grew 6.5% to `43,258 crore. Since its factories operating at 100% capacity of 7 lakh units per annum, Hyundai has freed up some capacity by shifting out production meant for exports. The contribution of Indian business to global revenues rose from 13% in FY17 to 17% in FY19.
Apart from upgrades of its most popular SUV Creta and sedan Verna, Hyundai is working on two compact SUVs, two sedans and at least one premium hatchback, persons familiar with the plans said. Last week, the company said its new compact sedan would be called Aura; analysts say it would probably take on Maruti’s Dzire and Honda’s Amaze. The launch is scheduled for anytime in the next few months. While the upcoming SUVs will compete with models like Maruti’s Brezza and Renault’s Duster, one sedan and a hatchback could take on the Ciaz and Swift, respectively.
Encouraged by the runaway success of its first connected car Venue, which began clocking around 9,000 units, soon after its launch in May 2019, Hyundai is contemplating rolling out many of the future models with ‘connected’ features. The features include geo fencing, location based map, auto crash notification, vehicle tracking and panic alert. New launches have helped the company beat the slowdown to some extent in the last one year. Since October 2018, when the passenger vehicle industry had already entered the slowdown phase, Hyundai has launched four products — Santro, Venue, Grand Nios and Kona.
With the new launches, the company not only sustained its market share. During the April-October 2019 period, while the industry volumes declined over 20% year-on-year (y-o-y), Hyundai’s volumes fell 9% y-o-y. Volumes of Maruti Suzuki too fell 23% y-o-y during the same period.
Harshvardhan Sharma, head — automotive retail practice at Nomura Research Institute Consulting & Solutions India, said as manufacturers continue to operate in a hyper-competitive space, it is imperative that products are refreshed frequently to wow the consumers. “In our past studies, we have observed that consumers have a positive image about brands which keep introducing new products, technologies and features in the market,” Sharma said.