Hyundai’s India drive shifts to top gear

It was 1996! India was just waking up to a sunrise of new-age conveniences, post the opening up of the economy only a few years ago. Sensing the opportunity, the Hyundai Motor Company arrived from South Korea and took India on a zippy drive, helping it discover the route to an uncharted, yet promising part of the automobile market, which it successfully tapped.

For a nascent market with persistent need for indulgence in modern automobiles, the choices were a few, and all that was required to ignite a boom was a spark, which came with Hyundai.

Reminiscing the times surrounding the Seoul-headquartered multinational corporation’s inception in India, Hyundai Motor India Managing Director and Chief Executive Officer Y K Koo says, “When Hyundai entered India in 1996, the automobile market was at a cusp of change. The triumph of liberalisation kick-started the much-awaited reform for the automotive sector.”

The first product that the company introduced to India in 1998 was indeed a revelation, with an array of never-before-seen design and technical features.

Called the Amica, Atos and Atoz across the globe, the Hyundai Santro took India by storm, and catapulted the company’s fortunes skywards from the very beginning itself. The car boasted of a tall boy design concept with multi-fuel injection and Bharat Stage-II technologies, which were a leap in comparison to what the competition offered at that time.

“The Santro changed the outlook of the Indian auto industry. India became the global production base of the Santro, and sold more than 1.85 million units worldwide from the Hyundai India manufacturing plant. The iconic model (through all its facelifts) ruled the hearts of Indian customers for 16 years since 1998,” says Koo.

The story of Hyundai’s glory in India is a lesson in understanding a market well and periodically surprising that market with something fresh, so as to retain relevance in the fascination of customers. The company got this strategic mantra right, which involved a lineup of great products, backed by robust network and service penetration, realistic pricing, and economised costs through localisation, among other moves, thus taking the 20-plus-years-old HMIL to become the second largest manufacturer of passenger cars and the largest exporter since inception – having sold 5,320,792 cars in the Indian market, and 2,696,187 in exports to more than 88 countries.

Hyundai for India

While the company has successfully garnered the No. 2 spot in the market, the journey has been steady.

“The journey has been an extremely satisfying and fulfilling one. We have received so much love and trust from our customers in India that has made us the most-preferred modern premium brand here,” reiterates Koo.

“However, when we entered India, the automobile industry was at a nascent stage. Our technology, production knowhow, process strength and marketing strategy were some of the factors that worked in our favour. The Santro was our first milestone,” he adds.

Overtime, the company introduced many contemporary concepts in India such as CRDi technology in diesel engines and Fluidic Sculpture 2.0 design, which enabled it to differentiate itself from the competition.

“Hyundai has always had a strong understanding of the Indian market and enjoys a steady relationship with our customers. We have a robust dealership programme in the country that enables us to reach customers of the Tier-II and III segments as well,” he says.

Today, Hyundai has 1,309 service points and 495 dealerships across India. It has launched a slew of products including the Grand i10, Elite i20, The Next Gen Verna and the 2018 Creta, with a view to gain greater market share from the current 16%, which is a far second to market leader Maruti Suzuki, which boasts a share of over 50%.

“One of the major factors that has led to Hyundai becoming a much sought after brand is its vast sales and service network,” opines an auto expert with a leading consultancy, who does not wished to be named.

He further adds: “Hyundai has been able to provide customers with a wide product portfolio - from basic to premium models - and at different price points. This has welcomed a wide range of customers to embrace the brand.”

Model buzz

Leading the popularity wagon for Hyundai in India are its models, most of which have tasted considerable success.

“The past two decades have been very successful for HMIL, with all our models becoming a benchmark in their respective segments. Our new introductions – the 2018 Elite i20, the i20 CVT and the 2018 Creta – have received phenomenal response. The SUV has received more than 25,000 bookings and more than 125,000 enquiries in just six weeks of its launch, while the Next Gen Verna leads its segment with 3,901 units in June 2018,” Koo informs.

The Grand i10, Elite i20 and Creta have marked record sales of over 10,000 units each, and contributed to over 56% of the total sales during June 2018. Meanwhile, the Eon, Xcent, Tuscon and Elantra are said to be performing well in their respective segments.

Sharing his perspective on the country’s market, Hyundai’s India head says, “The Indian market has evolved in a big way over the past two decades. Today, a car is not just perceived as a mode of transport, but has become a carrier that personifies an individual’s style. Nowadays, the customers’ preference for SUVs is also increasing.”

On that note, in 2017, HMIL contributed 17% of the total SUV space in India through the Tuscon and Creta, which alone saw over 267,000 customers.

“As a commitment to our India market, we will be strengthening our product lineup with the launch of nine models, which will involve two facelifts, two new segment vehicles, four full-model changes and an electric vehicle during 2018-2020,” adds Koo.

Futuristic Electric

There has been enough talk about Hyundai wanting to leverage its global technology and bring its EV solutions to India.

“Our strategy for an electric vehicle is in line with the Indian government’s vision of transforming the country into an EV market. We are planning to introduce our first electric SUV in India by the end of 2019, while another new launch will be under our sub-4 metre category,” he says.

Meanwhile, Hyundai’s next big pillar of success is the strides it has achieved in domestic manufacturing. Today, HMIL has two fully-integrated state-of-the-art manufacturing plants in Sriperumbudur, Tamil Nadu, which boast of advanced production, quality and testing capabilities. The facilities’ total annual production capacity is aimed at 750,000 units next year, from the current 700,000 units. Recently, the company deployed 560 next-generation robots for faster and smarter turnaround time.

“In the last 20 years of our existence, Hyundai has invested around
Rs 21,000 crore in our two plants. We plan to invest over $1 billion (around Rs 6,300 crore) in India till 2020, on new products, powertrain development and setting up of a new office building at Gurugram,” Koo says.

Hyundai is the first Indian auto manufacturer to achieve the milestone of rolling out eight million cars in just 19 years and nine months. It now targets to roll out 10 million units in the first half of 2021.

India for Hyundai

Today, India is an extremely important market for the company.

Hyundai Motor India contributes 15% to the Hyundai Motor Company, and this is a reason that the latter has announced an ‘Overseas Business Reorganisation’ transforming HMIL into a Regional Headquarters, along with North America and Europe in their respective regions. HMIL will now operate with more power and greater integration, taking swifter decisions to actively respond to rapidly evolving market trends and customer needs.

For the immediate future too, Hyundai is confident, looking at 2018 with renewed thrust. “Our focus is to sell over 700,000 vehicles this year,” concludes Koo.