First-time car buyers to be targeted by Hyundai

South Korean manufacturers, Hyundai Motors, are all set to launch their cheapest and smallest car and would be targeting first-time car buyers and motorists rurally in India. They would be launching their small car next month.

Hyundai being the 2nd largest car seller in the third biggest economy other than Maruti Suzuki in Asia do produce their cars in South of Chennai at their 2 plants.

Hyundai do face stiff competition from rival manufacturers in its attempt to defend 20% of market share. Volkswagen, Honda, Toyota, BMW and Mercedes are all fighting for expansion of their share in compact cars that makes up sales of 73% in the fastest and largest growing market when it comes to cars worldwide.

Sales Director, Arvind Saxena, Hyundai India, told Hyundai’s sales did depend on mid-range and higher end compact cars like the i10, i20 and Santro. He tells they would now be entering the cheaper and smaller car market where international companies were less active.

First-time car buyers to be targeted by HyundaiArvind Saxena told the company would be launching its small car sometime in October during the festive season at a time when Indian customers would be looking to buy big given the auspicious occasion.

Hyundai have not revealed the trade name of its upcoming car, but only known as HA so far predicting around 1,40,000 sales in the initial year of its launch. Hyundai are not bothered about the disappointment Tata faced in its sales of Nano cars despite a lot of fanfare around technical achievement and affordability of Nano.

Hyundai told they would be focussing solely on the design of the HA and would not be trying to compete on Nano’s price. Mr. Arvind Saxena predicts the HA to cast its spell on customers a bit more than what the Maruti Alto did by giving exciting interiors and designs, which would be aiming at young professionals and students.

He tells India did not have exciting features to lure young customers in the small car segment, and the existing models were pretty much basic.

Mr. Saxena also predicts HA’s growth to be good in the rural segment in India saying the company’s rural sales have shot up to 30% rurally from 19% in 2005.

There are a lot of small cars launched in India recently including Honda Brio, Maruti Cervo, Volkswagen Golf, Reva-NXR, Mitsubishi Colt, Nissan Ultra Low, and Mahindra Renault Sandero.

When it comes to unit sales, Hyundai is the 5th largest car manufacturer in the world when combined with its affiliation with Kia and has a total capacity to manufacture 6,70,000 vehicles in Chennai. Domestic sales are indeed growing when comparing exports from its plants.

Network dealership’s assisted in Hyundai’s growth in order to reach the rural area and now has doubled at 340 in 6 years with each dealership having 5 outlets that are spread over a huge area housing 2 cars in a showroom and sometimes also a workshop.

Arvind Saxena identifies growth challenges citing the car market in India has dipped over the last few months due to inflation and hike in fuel prices. July saw the dip in car sales, first time in over 3 years.

He further tells that the company was looking into increase models that use diesel like other manufacturers in India saying diesel was cheaper by 30% to 35% when compared to gasoline. He says the company has investment plans of about $400 million on a diesel plant in India, which would be completed in the latter part of 2013.

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