Sports Utility Vehicle set to drive auto sector growth in India

How is Hyundai India doing in terms of sales?
In 2015, Hyundai Motor India recorded 16 per cent sales growth in the domestic market while the industry made around 8 per cent growth. So, our growth was much, much higher than the industry average. In the first quarter of 2016 i.e. January-March period, industry clocked 2.2 percent sales upswing while our growth was at 7.8 percent. We obviously did a good job in first three months and sold 1.2 lakh units in the domestic market.

• Korean automaker Hyundai Motor Company drove into Indian market way back in 1996. A relatively unknown automotive brand in the country then, it gradually emerged as the second largest carmaker. Beginning with a single model, Hyundai Santro, in 1998, the carmaker has wide range of models now. Though a dominant player in passenger car segment, it failed to make a big mark in sports utility vehicle (SUV) segment until it launched Creta last year. It now plans to launch more SUVs.
• “India has a big market for SUVs given the road conditions, long driving ranges and large territory. Earlier, SUVs accounted for just 5% of the total sales and now their share has increased to 15% in overall passenger vehicle sales. We expect SUVs to drive the growth of auto sector in India,”
• Y K Koo, MD &CEO, Hyundai Motor India, tells The Hans India

How do you rate Indian automobile market?
India is the very important to market for Hyundai and so our focus will be more on the domestic market. India is now third largest market in the world after China and the US. Fortunately, the Indian market is growing faster and offers great growth for an opportunity. As GDP is growing between 6-8 percent, we expect the automobile market to grow further and expand.

We have already announced that we will launch two new products every year. This year, we will soon launch Hyundai Tucson and also an update of a sedan in the second half. We will go for complete model change for the sedan.

What kind of growth automobile industry will clock this year?
As I have already said, auto industry registered just 2.2 per cent sales growth during January-March period this year. It was very disappointing. I think a market will clock higher growth in coming months if the monsoon is good. I expect industry to register 6 to 8 per cent sales growth in 2016. It will be more or less same for Hyundai Motor as we are targeting to sell 5 lakh units in the domestic market this year against 4.76 lakh last year.

Do you have any plans to launch compact SUV?
In AutoExpo, we displayed compact SUV concept, Carlino. We are also planning a small SUV with 1000 cc turbo engine. But it takes time. We are expecting to launch the small SUV in the year 2018 or 2019. India has a big market for SUVs given the road conditions, long driving ranges and the large territory.

Earlier, SUVs accounted for just five percent of the total sales and now their share has increased to 15 percent of overall passenger vehicle sales. We expect SUVs to drive the growth in India. We have been very successful when we launched Hyundai Creta last year. We are selling about 8,000 units a month, accounting for 20 percent of our total sales. The waiting period is around two months now and so we are going to increase the production by 30 percent from June to reduce the waiting period.

Renault Kwid, an entry-level hatchback with SUV looks, is doing pretty well on the sales front. Do you have any plans to launch any new model that can rival such products?
It is very difficult for Hyundai to sell any of its models at a low price of Rs 2.5lakh. Hyundai Eon, our entry-level model, is priced at Rs 3 lakh. So, we can’t compete with such a low priced models. That’s why we are going to change our strategy and re-position Hyundai as the premium automotive brand in the mass market. For that, we are also upgrading our dealership network.

What is your take on Hyderabad market?
Hyderabad is one of the largest markets for Hyundai India. It is the fifth biggest market after Delhi, Mumbai, Bangalore and Chennai. And it’s fastest growing market for us as well. So, it’s very important to market for us. That’s reason why we have inaugurated three new showrooms and one digital outlet – first in South India – at one go.

In 2015, our national market share in passenger vehicle segment was at 17.3 per cent while the share was higher at 17.8 per cent in Hyderabad. In the first three months of 2016 too, the market share in Hyderabad was at 17.6 percent, much higher than the national average of 16.7 percent.

Do you have any plans to increase production capacity in India?
We have two plants with a total production capacity of 7.1 lakh units which also includes exports. We are looking to produce 6.65 lakh units in 2016. However, we can increase the production if sales grow. However, that will depend on market dynamics. We expect the exports to account for 1.6 lakh of total 6.65 units in 2016. That means exports account for 25 per cent. In 2015, we sold 6.43 lakh units in India and abroad.

Do you see your exports going up in 2016?
Last year, we exported 1.67 lakh units, but the exports will be lower this year at 1.65 lakh units because of the slowdown in the Middle East and South African markets.