Hyundai Motor India, one of the leading passenger vehicle manufacturers reported best-ever annual wholesales with 614,721 units sold in the country, which is 8 percent higher over last year. And for the upcoming year, Tarun Garg, COO, Hyundai Motor India expects “growth moderating” for the passenger vehicle segment overall. He however believes it is not an area of concern.
He said that for the last two years, there was huge pent-up demand in the industry and carmakers were sitting on huge backorder because of supply chain issues as well.
But now the supply chain has stabilised, despite pent-up demand not being there, “last 4-5 months the orders are very good. New fresh orders are also coming up and consumer sentiment is still good, it is not great, but it is moderate. Considering the geo-political risk, interest rates being high, placements not being good, the industry is still going good. We have to appreciate moderation, we always have kept expectations high,” he stated.
In fact, the company expects rural demand being stronger in the coming months, versus urban demand. For Hyundai Motor India, the rural sales made up for 19.4 percent in FY2024, compared to 18.4 percent a year ago. For the last 3-4 months, rural customers have made up for almost 20 percent of its overall sales, and it expects this to further grow.
This Garg attributes to various factors such as infrastructure development in terms of state and national highway, the upper-end spectrum of rural consumers continuing to purchase vehicles, aspirations among customers have increased leading to higher SUV demand, and lastly the availability of information. At present, Hyundai India has over 1,363 retail outlets of which 563 are rural sales outlet and growing.
Diesel models likely to see demand stagnation
There are several automakers in India, who have decided to pull the plug on their diesel cars, but Hyundai still offers diesel engines in its model line-up.
Garg believes that while the overall share of diesel cars has come down significantly, it will continue to remain stagnant. “While it may not see growth, but the demand will is expected to remain stagnant.”
He believes that diesel will have limited use in SUVs or in the high-end luxury cars, the numbers will not go up, but as the industry grows, the growth will come for petrol, CNG, turbo, EVs. “The main issue is in-line with what customers want. The customer preference is very limited (for diesel models) in the mid- and high-end SUVs, where the running is very high.”
He cites an example that the average running for Creta SUV’s is almost double that of the Nios, i20 and other smaller cars.
Even though the share of SUVs has gone up significantly for the passenger vehicle industry, sedans share has gone down from 10.3 to 8%, but for Hyundai Motor India its market share Garg says has gone up.
“The Hyundai Verna has got good response. We wanted to get leadership positions for Verna and have been able to sustain that for the last 12 months. The Verna has an average sales of 1,800 to 2,000 units a month, while it may not be great, but it is still good. Hyundai Motor India’s aims to meet customer expectations for their mobility needs. As long as we are able to satisfy the customer demand, we will have products to meet their needs,” he said.
Responding to a question on discounting, he said the current discounts offered by auto dealers are “very normal, and reflects the true status of the industry. Last 2-years were looking at different due to pent-up demand and the supply chain not being there.”
