Majority of semiconductor issues have been resolved, resulting in a normal schedule for vehicle production, Hyundai Motor India’s chief operating officer (COO) Tarun Garg told FE. “Majority of the semiconductor issues are behind us now. The production is normal, supplies are much better, which means that our ability to really service demand has improved,” Garg said.
“The stock levels are now going towards normal level,” he said, adding that on an average the dealers keep a stock level of three to four weeks.
The semiconductor supply constraint has been hurting the production schedules of the auto industry.
Garg also pointed out that waiting periods have come down but are different across variants and ranges from five to about 10 months. “The waiting period keeps increasing as we are witnessing a very strong flow of fresh bookings. While we are kind of prepared, we have dispatched vehicles in advance to the dealers, but the booking influence is much more stronger,” he said.
On sales, Garg said that a healthy monsoon season as well as the Centre’s infrastructure-creation push are expected to boost off-take in the rural market.
“Monsoon should give a push to consumption in the rural areas,” Garg said, adding that the automaker is witnessing a “good traction for both SUVs as well as other cars”.
According to Garg, other factors such as improving road infrastructure, higher minimum support price along with enhanced data consumption are supporting this trend.
“Last year, we sold more than a 100,000 vehicles in rural areas. This year, in H1 (first half), we have already sold 53% (of last year’s sales in rural areas) at 53,000 vehicles. This is a growth of about 11% over last year,” Garg said.
“Penetration wise, we are at a very healthy 19%, which used to be around 16-16.5% about three to four years ago.”
He mentioned that sales momentum is expected to carry forward into the festive season especially on the back of recently-launched entry-level SUV Exter.
“Exter has received a great response in terms of bookings. So, going forward, we are expecting that this will also contribute in a big way during the festive season,” he said without divulging any booking figures.
“Besides, the pent up demand due to Covid has diminished and now we are witnessing a strong current demand which should play out very well during the festive season.”
The company expects to increase the share of SUVs in its overall sales to about 60% from the current 53% on the back of the Exter.
“Our market share before the Exter was about 18%. This share should go up,” he said.
“From January to June, the industry’s SUV share in the overall sales was 46%. We were at over 50%.”
On the downside risks to growth, Garg cited high interest rate and general inflation as challenges.
“They are a dampener because 80% of the cars are financed. Whenever interest rate goes up, it has an extra impact on the customer.”
In terms of exports, he said that the automaker has received a healthy response from markets of Mexico, West Asia, Africa and Latin America.
“The export demand seems to be quite robust. We will have the Verna launch in these markets soon and the NIOS as well. So, I think, there are more reasons to be positive,” Garg said.
“At the same time, we fully understand the global headwinds.”