‘The Santro made HMI what it is today’

YK Koo is not too worried either about the prospects of Chinese car manufacturers entering India or of his company’s affiliate Kia Motors setting up shop here.

The Managing Director and CEO of Hyundai Motor India, the country’s second largest car-maker, believes that his company has built a strong business over the last two decades by bringing in the latest technology, new design and styling in its cars and sports utility vehicles and, above all, building a strong bond with its customers and dealers.

It is these features that have helped HMI do well in the domestic market even though its products are more expensive than competing vehicles of market leader Maruti Suzuki.

The Indian market, he says, is not an easy market. Customers are smart, cost conscious and aware of technology.

“We have 15 players in this market. Out of this, how many are running their business with success,” he asked, during a recent interaction at the company’s plant at Irrungattukottai, about 40 km to the west of Chennai. “It is their choice to come to the Indian market, but to make a success is a different story,” he added.

India strategy What has worked right for Hyundai? Ensuring customer satisfaction, he said, and added that Hyundai Motor India’s strategy had been to bring in the latest products and technology and features, cars with unique styling and design, and make a mark as an innovative brand, a game changer and a trend-setter. Those were the company’s strengths and the reasons for its success.

A 32-year veteran of Hyundai Motor Company, this is Koo’s third stint in India. He was appointed as MD in November 2015 and prior to that had served two stints for about nine years.

He pointed out that when Hyundai Motor India launched its first product, Santro, in September 1998, the car was unique for its tall boy design, had multi-point injection (when others had carburettors) and met Euro2 emission standards. “And, Santro made HMI what it is today,” he said.

New, refreshed models The company has committed to invest another ₹5,000 crore over the next four-five years, to introduce eight models. Three of these, including a compact SUV and a family car, will be new cars while the others will be full model change of some of the existing vehicles such as the Grand i10, Elite i20 and Creta.

A refreshed version of the Verna sedan will be launched in August. It will have the same engines, but some features and specifications will be either first in India or a world premiere, Koo said.

Koo said HMI’s R&D centre in Hyderabad worked with its global R&D in Korea to adapt the vehicles for Indian conditions. The road conditions are different, the temperature is “hot, hotter, hottest” and the air-conditioners have to be adapted for this, the horns are extremely important in India and hence have to be long-lasting. “In Korea, if you sound the horn, there will be a fight, but in India, it is different,” he said.

Electric vs hybrid On the Centre’s emphasis on electric vehicles, with the tariff structure favouring them over hybrid cars, Koo said HMI planned to unveil a hybrid vehicle at the 2018 Auto Expo in Delhi, but would now have to shelve it.

Hyundai had electric vehicles in its portfolio and would have to review which product would be ideal for Indian conditions. He did not expect electric vehicles to become popular in the next five years as issues regarding infrastructure, cost of battery and charging points had to be sorted out first before they could become widespread. (The GST Council had fixed the rate at 12 per cent for electric vehicles and 28 per cent plus cess for petrol, diesel and hybrid vehicles. The effective rate on hybrid vehicles would be 43 per cent.)

He did not agree with the suggestion that the government’s move to go in for EVs over hybrid vehicles was wrong. “EV is their choice. They have to make the infrastructure. It takes time. That is why they give a lower tariff,” he said.

Competition from Kia Koo, who has extensive experience in sales and marketing across different markets, says Hyundai’s strategy would be independent of Kia’s, a part of the Hyundai-Kia automotive group.

Kia has announced plans to set up a manufacturing plant in Andhra Pradesh. In all markets, including Korea, Hyundai and Kia have been competitors. Their product portfolios are similar. “We are fair competitors in the market. That is our strategy. Fair competition looks great — new technology, new customers, new business, portfolio,” he said.

He said Hyundai Motor India was working to its near-full capacity of 6.8 lakh units; it could stretch production to seven lakh units a year.

In 2016, the company sold five lakh cars in the domestic market. It could cut down on its exports to meet domestic demand. “As a long term [plan], we have to review [capacity expansion], but not now,” he said.

Shah Rukh contract Koo said HMI had renewed its contract with actor Shah Rukh Khan for another two years. Khan had been HMI’s brand ambassador since 1998, with the launch of the Santro.

Last year, at the 20th anniversary celebrations, Khan told the company’s employees and other invitees that he was HMI’s oldest employee. “Actually,” said Koo, “I am older than him at the company. I came in here in 1997, a year before he did. But I didn’t want to tell him that, because I didn’t want to let him down,” he guffawed.