The country’s second-largest carmaker by volumes, Hyundai Motors India, commands 22% share of the domestic market. The company, which entered India way back in 1998, is the largest exporter with a 35% share. Managing director and CEO, Bo Shin Seo in an interview with Malyaban Ghosh, says Hyundai aspires to sell 5 lakh vehicles in the domestic market during CY15 and increase its market share by 1% each year. Excerpts
How was cy14 for Hyundai?
As an automobile manufacturer, 2014 was a year of excellence for us. We ended it with an all-time high market share of 21.8% in the passenger car category. With the launch of new models every year, Hyundai offers a complete portfolio of new-generation ‘Modern Premium’ products to Indian customers. We are happy with the growth we have achieved so far — we are the number two player in India and have been recording growth in market share every year.
Our aspiration is to achieve the 5-lakh-sales mark in the domestic market in 2015 and a market share increase of 1% every year. The domestic market remains a priority but we would also like to retain 40% share of car exports. Our new launches and refurbishments, strong focus on the rural market and the H Promise upgrade (used car sales department) will result in future growth.
What steps are you taking to arrest the fall in rural vehicle sales, especially in the entry segment?
Rural sales contribute around 20% of our volumes. At Hyundai, we are confident of our performance in the rural market through a strong network of 320 sales outlets and strong products.
Our products, from the Eon and i10 to even the Grand i10 and Elite i20, have got a good response from the rural space, which speaks volumes of the demand the market can offer. We want to achieve sales of over 1 lakh units in the rural market from the current 70,000 a year and, in order to accomplish that, we will be adding more sales points in rural areas.
Even 1% growth in the rural space is a big number and Hyundai is aiming to capitalise on the same. We have tied up with 30 institutions that will provide finance schemes and make the products more accessible to customers.
Why did you enter the hyper-competitive compact SUV segment?
We were already present in the sports utility vehicle (SUV) segment in the premium category with the Santa FE. In 2015, we brought in the i20 Active, a sports-styled version. With the Creta, we are entering the full-fledged volume segment of SUVs.
SUV sales have stagnated here, but with the Creta we are hoping to turn it around. The Creta will be an influential global model for the Hyundai brand in one of the fastest-growing vehicle segments, helping the company reach out to more consumers in new and established international markets.
Given the surge in the number of recalls, do you think carmakers are finding it difficult to maintain quality with the rise in volumes?
A recall is a progressive step and a healthy practice that reflects transparency in the automotive business. In today’s time, it shows consciousness on the part of the manufacturer towards customer satisfaction. In a fast-growing market like India, a recall policy takes care of emerging safety issues and improves confidence of all stakeholders.
The Indian customer has become more accomodating towards recalls. The change in perception is evident since buying sentiment is intact.
Which countries attract most of your products? Any new country that you want to enter this fiscal?
Hyundai Motor India exports to over 85 countries. And India has been its global export hub for compact cars. Since 2003, our strategy has been to Make in India products for the domestic and global market. We are focusing more on the emerging markets of Africa, Latin America and southeast Asia.
In addition, the endeavour would be to penetrate deeper the existing markets of America, the Middle East, Peru, Chile, Columbia, Mexico and Australia with a range of our benchmark products such as the Eon, i10, Grand, Xcent and Elite i20, Verna.
What is your capacity utilisation? Are there plans to expand the existing capacity or set up a new one?
Our capacity utilisation is 98.5% on an installed capacity of 680,000. We would like to utilise the free capacity in future with our existing product line and new launches.