We are seeing Indian customers moving away from small cars: Hyundai MD
The country’s second-largest passenger vehicle maker Hyundai Motor India Ltd (HMIL) has completed 26 years here this year. In its over two decade journey, the company has proved to be a competitive player not only with other global companies but also with major domestic players.
However, it has seen some tough competition of late from homegrown firm Tata Motors, which recorded better monthly sales from Hyundai on two occasions within six months — the first time in December 2021 and again in May this year.
Unsoo Kim, the new Managing Director and Chief Executive Officer of HMIL, says there is a big opportunity in India in the current scenario and the company is optimistic for its future journey. BusinessLine caught up with Kim to get more details. This is his first interview with any media houses, after his appointment in January. Edited excerpts:
As the new MD and CEO of the company, what are your priorities?
India is at the cusp of transformation in the mobility space. With the growing economy, India is also witnessing an increasing number of buyers looking for modern, premium, safe and high-tech cars. With a young population, strong demographics and given the current geopolitical situation, India stands out with a big opportunity for future growth.
At Hyundai, amongst other things, one of my prime priorities is to strengthen our electrification strategy for the Indian market and also scale up corporate social responsibility (CSR) programmes to reach out to communities and society as a lifetime partner for a mutually sustainable world.
What’s your take on the Indian market? By when do you think the chip shortage issue would resolve here?
The Indian automotive market offers a plethora of opportunities and India is one of the most significant markets for Hyundai. The auto industry over the last two years witnessed unprecedented changes.
Presently, the situation is improving, we expect a better supply scenario in the second half of this year and this situation is anticipated to further improve in 2023, however, uncertainty remains and we are only cautiously optimistic.
Hyundai Motor India has booking orders of more than 1.30 lakh. By when do you think the customers will get their purchases?
Currently, we have more than 1.35 lakh pending customer bookings across our model range and we are doing our best to improve supplies and serve our customers at the earliest possible.
Before the semi-conductor crisis, we had registered the highest-ever market share of 17.4 per cent since inception in the calendar year 2020. We are working with our partners and vendors to fulfil customer purchases at the earliest.
With the new regulations coming in like six-airbags mandatory in cars, do you think it would make it more expensive for the customers? And, do you think that will impact the sales in the coming months?
Hyundai has always complied with the government’s guidelines to ensure our cars continue to exceed the needs of our customers. As far as sales are concerned, Hyundai has been witnessing a rise in the ticket size of vehicles being purchased by our customers. These buyers are more interested in functionality, convenience, performance and safety.
For instance, while the industry sales for vehicles greater than ₹10 lakh is at 37 per cent, Hyundai portfolio’s sales over ₹10 lakh stand at 41 per cent. So, we are seeing Indian customers moving away from small cars and looking at an increase in ticket size and aspirational purchases that fulfill the needs of new-age customers.
In the long run, added features such as six airbags or even connected cars such as Advanced Bluelink with multiple safety elements, will become a common purchase trend for buyers.
What is your target for this year in sales as compared to last year?
We are cautiously optimistic about the future prospects. The industry is witnessing green shoots of progress in terms of sales and industry volumes and Hyundai has strong plans to introduce new products and technologies that will catalyse this sales trend.
We have launched the new Hyundai Venue which has been a strong volume driver for us with more than 28,000 customer bookings and going forward, we will be introducing the all-new Hyundai Tucson which will drive future sales prospects. While we are balancing demand and supply at an optimum capacity, we are cautiously optimistic about future sales.
Apart from new EVs, what is your strategy going forward in alternate fuels like flex-fuel or fuel cell or plug-in hybrids, as the government is promoting such mobility solutions in India?
As India’s leading smart mobility solutions provider, we are with the government of India in promoting new sustainable technologies and mobility solutions. We have the requisite resources to introduce alternate fuel technologies that will be introduced at the opportune time and basis market demand/sentiment.
Hyundai is there in India for the last 26 years but hasn’t gone beyond Chennai in terms of expansion of plants, while others like Maruti Suzuki are expanding everywhere. Don’t you think it’s time for new investments and new facilities?
We are well capitalised for now and have invested $4 billion since inception. In addition to this, for expanding our new EV line-up, we plan to invest around ₹4,000 crore towards the expansion of six electric vehicle line-ups till 2028.
July 03, 2022