Hyundai wants to regain entry-level market share: MD, Hyundai Motor India
The second largest carmaker by market share has made its intentions very clear, by pricing Santro aggressively low against most variants of its arch-rival Maruti Suzuki’s small cars.
On the importance of Santro
In India, the compact car segment occupies about 45-50% of the market. Over the years the share of the compact segment will fall gradually, but it will still be a large part of the market and will continue to remain a backbone of this market and hence we brought back the Santro. When we discontinued the Santro in 2014, we lost out on a strong contributor to the segment.
We want to regain our share by reaching out to the entry car buyer.
We are eyeing about 30% of the segment.
On SUV designed small car
I think a small car is required for the entry car buyer. If the market requires we could develop a Micro SUV in the long-term
On electrifying Santro and EV plans for India
We have no plans for an electric Santro. We will have a top-down strategy on EVs. We will have an EV Kona coming first next year, then we are looking at an electric SUV, maybe QXI and then an electric car. What is after Kona, whether it is an SUV or a car is something that we are deciding.
On plans to export Santro
Our immediate focus is on the domestic market. We plan to start exporting from next year. Santro is a car made in India, for India and for the world.
We may begin with 15,000 to 20,000 units of Santro exports in 2019. Our focus earlier was on Europe exports, the new Santro will also cater to the markets of South Asia, South Africa, and Latin America.
Exports have been a critical pillar in the past, we will continue to see at least 25% of Hyundai’s production to be exported.
On Santro launch in a falling market
The sentiment is not that strong with the fuel price increase and interest rates, but we feel with the Santro we will be able to create excitement in the market and grow our volumes. We already have 23,500 bookings; that means it is sold out for the next three months.
And these bookings were through the online channel, now our dealers will start generating momentum. Our price is very competitive. We are confident about its growth.
On a stagnated market share
We have a strong product pipeline in place. We have plans of coming out with eight new products till 2020, which will help us build volumes.
We have created capacity for additional 1 lakh volumes.
The way we look at the market, however, has conceptually changed.
We are not running behind volumes or market share. We are instead focussing on quality and profitability. The 16% market share is a reasonable market share. We don’t want to grow volumes at any cost. Earlier the market growth was different but demand dynamics are changing. Companies are sitting on over capacity.
In our market, there is already over capacity. Many players are operating at 45-50% capacity utilisation, and we are operating at 100% capacity utilisation. We are happy to grow bit by bit on volumes with domestic, exports, profitability, quality and customer delight instead of pushing sales.
On Hyundai’s vision 2020
We will hold our 16% market share. We expect the market to grow by 7-8% and our volumes will grow beyond market growth.
We expect pre-buying ahead of the 2020 emission norms implementation as meeting those norms will increase the cost of the car. So in the year, 2019 you will see growth because of pre-buying, however, the demand will slow in 2020, due to the price increase.
On Hyundai India’s role in global operations
India is an important production base of Hyundai globally. It is an export base catering to the markets of Asia, Africa, and the Middle East.
India’s contributes around 16% currently and has been steadily moving up. We have seen the share of India increase from 13% to 16% over the last three to four years.
Impact of Kia’s rollout in India
Hyundai has already established itself in the Indian market, we have been around for the last 20 years, new players will have to prove themselves here. Kia will be able to make a success, but they will have a different strategy. It won’t be easy.
There are many who feel that Hyundai is not a Korean company any more. It has embraced Indianness, and it touches the hearts of millions of people. Why did Santro come back? Because it holds a special place in the minds of Indian buyers.
On synergies with Kia
I would not like to comment much on Kia. As far as Hyundai Motor Group is concerned, there will be synergies globally, we will see it in India, too.