We will soon touch the market share of 22%—the highest for Hyundai India since inception. We are confident of increasing our market share 1% every year for the next few years...
This Wednesday, Hyundai Elite i20 won the Indian Car of the Year (ICOTY) award. Elated on its performance—the car has gotten 63,000 bookings until now—Rakesh Srivastava, senior vice-president, Sales & Marketing, Hyundai Motor India Ltd, says that the ICOTY celebrates the huge success of this premium small car. Last year too a Hyundai car, the Grand i10, won the ICOTY, so this year’s award makes it two times in a row for the Korean car-maker. In this interview with Vikram Chaudhary of The Financial Express, he adds that, going forward, the company will focus on SUVs. Excerpts:
The Elite i20 has gotten 63,000 bookings and this week it won the ICOTY award. But so many bookings mean a long waiting period. Do you think an Elite i20 customer will wait or move onto a different car?
First, I must say that we have been able to supply 40,000 units of the Elite i20 to customers until now. The waiting period for the car currently is almost two months. Indian customer is rational as well as emotional about the car he wants to buy. We believe the customer is willing to wait if the car is good. In fact, this phenomenon is being reflected in the way the Elite i20 has been gaining sales over time—in its first month it sold 6,600 units, in the second month it sold 8,600 units, in the third month it sold 8,900 units, and last month it touched the figure of 10,500 units. The ICOTY, therefore, celebrates the huge success of the Elite i20. Further, the platform of the Elite i20 is such that various design forms can be created on this platform.
Are you pointing towards the Elite i20 crossover vehicle—the Elite i20 Cross? And the upcoming compact SUV, which is apparently the ix25?
We have indeed planned new products for 2015. A new design form of the Elite i20 could be one of these. And yes, we will launch our global SUV in India.
Will you again play on competitive pricing?
Whenever we launch a product, we always target above 90% localisation. The same will be for our compact SUV. We are fairly confident that we will surprise the market with our prices.
What else apart from these two cars—the facelift Eon, the facelift Elantra, the facelift Verna, the new Sonata…
While we are refurbishing some of our products, it is too early to comment on this right now.
You will be bringing new products to India in 2015, but your Chennai plant is functioning at 99%-plus capacity utilisation, and there is no news of Hyundai setting up a new plant in India. Will you cut exports to fit in these new models? You have been cutting exports anyway as your domestic demand is rising…
We are definitely operating at a high capacity utilisation. This has been largely due to strong domestic performance and equally good export performance. We maintain a good balance between domestic sales and exports, and it has been Hyundai India’s strategy right from the beginning. For gaining volumes you need to get four things right: a strong product portfolio, a strong channel, aspirational brands, and a strong team. We have gotten all four right.
Where do you see the Indian car market a few years from now? The recent downturn hit it badly…
Despite the recent downturn, the Indian automobile market is growing and remains one of the fastest growing in the world. Every six years, the Indian auto market doubles itself. This year it stands at around 26 lakh units, so by 2019-20 it should grow to 50 lakh units. Along with this, Hyundai India is also growing and we are almost on the verge of breaking the 4 lakh domestic sales barrier this year. Traditionally, Hyundai India has been a strong exporter and now as our domestic sales have been rising, we have freed up some capacity; for example, a chunk of export requirements for the European market have been shifted to Turkey from India.
What is the total capacity of the Hyundai Chennai plant?
We currently produce a total of 6.8 lakh cars and the capacity can be ramped up to 7 lakh units. I believe this should be enough to meet our domestic and export requirements for some more time. Our next priority is to build up our product range further. As I said, volume is a derivative of strong products.
Beginning from the Santro, first we build up our compact car range; today we have five compact cars. Then we focused on sedans; we now have four sedans. The next phase is to build up our SUV range; the new Santa Fe premium SUV is doing well but, going forward, we will focus more on compact SUVs and crossovers—our compact SUV will be launched in a few months from now. Another thing we are going to focus on in 2015 is making our dealerships full-fledged automobile solutions one-stop shops, from providing extended warranty and finance solutions to focusing more on our used-car business, the H-Promise. In fact, we are working very strongly on the H-Promise. One more landmark for us is that we will be servicing 42 lakh cars this year in the country. Further, we will also be focusing on rural initiatives, corporate initiatives, fleet sales and leasing. Then will come our driving schools initiative.
But what stops you from announcing new production capacity or a new plant?
The strategy is first building up the selling capacity further, before we direct our energies towards production capacity, because anyway setting up production capacity will take us only 14-18 months.
Is the reported decision to discontinue the Santro got to do anything with your limited capacity?
The Santro still exists. It is available for sale at all dealerships, and when I say it exists, I mean that even last month we produced the Santro. The Santro still sells more than 2,000 units a month. It is our first brand so the Santro is very dear to us.
Is a revamped Tata, with new products and a new India head, a challenge?
Indian automotive industry will keep growing for quite some time and there will be enough room for perhaps every manufacturer in that growing market, provided the manufacturer has a good product portfolio, aspirational products, channel strength, and a good production and selling capacity.
How fast do you see Hyundai India growing?
Today we boast a market share of 21.9%; we will soon be touching 22%—the highest market share for Hyundai India since inception. We are now sure that we have the capability of increasing our market share 1% every year for the next few years.