India firmly on the radar for Hyundai

It was at the 1998 Delhi Auto Expo when Hyundai first made known its India intent with the unveiling of the Santro hatchback. This was the year when all eyes at Pragati Maidan were on the Tata Indica.

It was also the time when Suzuki Motor Corporation and its partner, the Indian Government, were locked in a bitter war-of-words.

There was a sense of enormous excitement coupled with fierce nationalism. This was thanks primarily to Tata Motors which was keen to show that India could also make its own car even while it had thrown open its gates to multinationals. The Indica was naturally the cynosure of all eyes at the Expo but nobody could ignore Hyundai either which, apart from the Santro, also had the Accent on display.

Many Expos have come and gone at Pragati Maidan since then, but the Korean automaker is perhaps in the most exciting phase of its India tenure. Its recent launches comprising the Grand i10, Xcent and Elite i20 have caught the fancy of the market and are clocking over 20,000 units between them each month.

The entry model, Eon, has settled to a routine of nearly 7,000 units while the old warhorse, Santro, comfortably does around 4,000 cars.

On Thursday, Hyundai declared its third quarter results in Seoul where India clocked sales of 4.44 lakh units for the January-September period.

The i10 was the largest selling model with 2.12 lakh units followed by the i20 with 82,000 and the Eon with 74,000 units. Other models including the Santro, Xcent etc chipped in with the balance 76,000 units.

Sure, Maruti continues to be the market leader with monthly numbers averaging over one lakh units thanks to a host of successful models such as the Alto, Wagon R, Swift, Dzire and the more recent Celerio. It is equally true that the company has faced no threat to its  numero uno  status for many years now.

Yet, what is interesting about Hyundai is a new sense of energy and determination within its system. The new products (i10, Xcent and i20) have been loaded with features which have caught the attention of the market in a big way. “In terms of styling and design, Hyundai is making a strong statement which young buyers are finding incredibly hard to resist,” a top auto executive says.

Will this be enough to upset the Maruti applecart during the course of this decade?

Very unlikely given that the Japanese automaker is not being remotely complacent even for a minute.

Aware that it is still associated with the small car imagery, Maruti has been working on ideas like AMT (automated manual transmission) on its Celerio and more recently, the Alto. The Ciaz will show if the company can make a strong mark for itself in the sedan segment.

Hyundai also has competition from Honda which has staged a strong comeback with the Amaze, new City and the Mobilio multipurpose vehicle.

“The Xcent has made a bigger impact than the Amaze and Hyundai will now have to replicate this with the Verna against the City,” an industry observer says.

Why is Hyundai making news now when it has already proved that it is Maruti’s closest rival?

After hitting paydirt with the Santro and Accent in the late-1990s, the Getz and Elantra did not quite set the market afire.

And even as numbers continued steadily, there was really no excitement on the product front.

As an entry-level option, the Eon was an interesting product from the Hyderabad R&D centre but was unfortunate to be launched when the country was in the mist of a diesel buying craze three years ago. With petrol back in favour now, the car has made up lost ground.

Unlike Suzuki which, apart from Japan, has India and ASEAN as its key growth regions, Hyundai is well and truly a global company with a presence in the US, Europe, China and BRIC (Brazil, Russia, India and China) regions. In the process, it becomes doubly difficult for the company to focus exclusively on countries such as India when other parts of the world, especially the West, are far more profitable markets.

This is a challenge that Toyota also faces except that Hyundai has rediscovered its mojo a lot faster in India.

Going forward, the company will launch a compact SUV here while building the base for exports to West Asia and Asia-Pacific.

And even while it focuses on important global projects such as the electric vehicle (planned with Daimler) which debuts in Europe next year, Hyundai will now step up the gas in a big way in India.