‘Going forward, we will have a renewed focus on rural India’

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Published: December 26, 2015 12:02 AM

Our channel network has worked strenuously to create regional advocates in key rural markets. These advocates are local influencers who share with potential customers the Hyundai value proposition. We are constantly increasing our market share and today almost 22% of our sales come from rural India, said YK Koo, MD & CEO, Hyundai Motor India Ltd

At a recent event on road safety organised by Hyundai Motor India Ltd (HMIL), brand ambassador Shah Rukh Khan quipped that he is the senior-most employee of the company in India, with an association going back to 1998. YK Koo, the new MD & CEO of HMIL, quickly chipped in, saying that he came to India a year before Khan became the brand ambassador!

Koo has worked with HMIL for over nine years in two different roles—he was one of the founder members of the company’s operations during 1997-2001 and played a key part in building sales & marketing operations during 2008-11. Prior to taking up the current position, Koo was the general director & CEO of Hyundai Motor (CIS).

Within a few weeks of his joining as MD & CEO, the company’s SUV, the Creta, won the prestigious Indian Car of the Year (ICOTY) 2016 award. “Winning the ICOTY symbolises the trust and faith of customers and experts alike in the brand,” Koo says.

In an interview with FE’s Vikram Chaudhary, Koo adds that the company—which has invested over $2.7 billion in India—will focus on rural-specific marketing strategies in 2016. Excerpts:

How confident was Hyundai of winning the ICOTY 2016, making it three times in a row?

We make cars in India, for the world, and this means our products stand for innovation and quality. We are honoured to win the most prestigious automotive award in the country for our “made in India, for the world product”—the Creta. Winning the ICOTY three times in a row symbolises the trust and faith of customers and

experts alike in the Hyundai brand. (Hyundai earlier won ICOTY 2015 for Elite i20 and ICOTY 2014 for Grand i10.)
We aspire to be the most loved, trusted and caring car manufacturer in India. The success of the Creta in both Indian and overseas markets—and the SUV was launched less than six months ago—is a testimony to the local quality standards that are benchmarked with the global standards of excellence. The Creta has recorded 4,00,000 enquiries in India and over 74,000 bookings, while in the overseas markets we have received 16,270 orders from over 75 countries.

While the Creta has faced mild competition until now (from Renault Duster and Nissan Terrano), in 2016 Maruti and Mahindra will also enter the segment. How prepared is your sales channel?

We have worked hard to strengthen our sales channel. The dealership network now stands at 437, with additional 1,100 service points and 327 rural sales outlets (RSOs). We believe that the customer is the best advocate for the brand and also the key stakeholder. Therefore, as a company, all our energies are directed towards meeting and exceeding customer demands—hospitable sales service, strong after-sales support and family-like sales professionals. Going forward, we will focus more on our new initiative called the Global Dealership Space Identity (GDSI)—a dealership design strategy aimed at creating a unified and a premium look at all our stores.

While the Grand i10, Elite i20 and Creta are doing very well, your four models—Eon, Xcent, Verna and Elantra—have seen declining sales over the years. A few of these are also priced higher than competing cars…
Our sales strategy is to offer best-in-class, modern, premium products to consumers across categories. The Eon, Xcent, Verna and Elantra have had a successful run and continue to deliver value to our customers. We constantly refurbish products and also refresh their price value equations, which lead to reduced cost of ownership. This, combined with our assurance of higher returns on resale and monthly sales promotion activities, helps boost the value proposition of our cars, including these four.

What is going to be your marketing strategy to engage Indian customers in 2016? Would you be enhancing the digital presence of Hyundai India?

Since we see ourselves as an integral part of the Indian family, our marketing efforts are therefore aligned with the Indian culture and ethos. Hyundai follows a ‘smart marketing’ strategy, in which there is a strong emphasis on digital media, with a robust 360-degree marketing plan. Our focus is on offering best-in-class experience to customers across all touch points—we call this ‘Experience Hyundai’. To reach out to the millennial audience, we have significantly strengthened our presence across digital domain. Today we enjoy one of the largest followings on social media, with over 6 million fans on Facebook, and have novel techniques to connect, engage and interact with the digital audience.

With rural demand slowing, almost all manufacturers took a hit. How does Hyundai intend to raise its market share in rural India in 2016?

Rural markets are a key component in our strategy to acquire more market share. In 2016, our approach to these markets is going to be an ideal mix of dealerships, service initiatives and increased rural sales outlets. We will also focus on rural-specific marketing strategies to communicate with specific target audience in customised languages across geographies. In fact, our models like the Eon, i10, Grand i10 and Xcent have strengthened our connect with rural India.

Our channel network has also worked strenuously to create regional advocates in key rural markets. These advocates are local influencers who share with potential customers the Hyundai value proposition. We are constantly increasing our market share and today almost 22% of our sales come from rural India. With the success of the Creta and the strong sentiment the vehicle enjoys—it’s also an aspirational SUV—we are confident we will be able to consolidate our market share further.

What are your views on the NGT banning registrations of new diesel vehicles in Delhi until the next date of hearing or the Supreme Court order banning all diesel vehicles in NCR above engine size of 2000cc till March 31? Urban citizens do suffer due to vehicular emissions, isn’t it?

The matter is sub judice and we therefore reserve our comments. However, Indian auto industry is one of the largest contributors to GDP and generates high employment across sectors. We request that respective regulatory bodies should give a serious view to create a robust roadmap for the automobile industry for the future. The industry has already made plans to invest in diesel technology as per BS-V emission norms to be implemented by 2019 and such decisions can impact additional investment.

How much did Chennai floods derail your manufacturing and logistics operations?

Chennai floods were an unfortunate calamity that caused great loss of lives and damage to property. However, the strength and resilience of this city was reflected—it managed to pull itself up and get about its business in a record time.

We have a deep bond with Chennai; the city welcomed us 19 years ago and is our home since then. When the floods struck, we responded immediately to the situation and donated R2 crore to the Chief Minister’s Public Relief Fund.

While we provided food, home essentials and clothing in certain regions, now sanitation and health camps are on the anvil. In addition, for Hyundai customers, we deployed 17 emergency road service teams to assist vehicle owners whose cars were affected.

Is Hyundai India R&D mature enough to design a new car from scratch?

Hyundai India R&D is an integral part of our operations in India. The team in Hyderabad works in collaboration with their counterparts in Korea to create products, all of which have gone on to set new benchmarks of success across the globe.

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