Hyundai aims to reclaim market share in India with new SUVs, including EVs, amid rising competition from domestic automakers.
The Korean automaker Hyundai Motor was once a leader of foreign automobile makers in India but it has been dominated by rising indigenous players and the company is now planning to comeback with aggressive SUV models. This initiative is in line with the company’s strategy to complete a $3 billion IPO in India. The initial phase of the SUV deployment is expected to start with the first India-produced electric car by Hyundai sometime in the coming six months.
Challenges from Domestic Rivals
Hyundai has always remained second only to Maruti Suzuki in terms of sales in India. On the other hand, the competitive environment has shifted significantly with two of India’s home grown automotive giants, Tata Motors and Mahindra & Mahindra, challenging Hyundai’s position through recently released models of new generation SUVs. Hyundai’s market share in India has reduced to 14.6% from 17.5%, over the period of four years and Tata Motors on the other hand has progressed to nearly triple its sales to 14%.
Investment and Expansion in India
Hyundai’s motor manufacturing plant in India is the third-largest sales revenue contributor for Hyundai auto stations after the USA and South Korea. It has invested $5 billion in India and has planned to invest a further $4 billion in the next 10 years. A fully electric SUV made in India is planned for 2025 and will be followed by four more such models through the end of the decade. Another direction in its development can also enable the company to turn India into a regional EV exporting country.
Hyundai’s Broader Strategy and Its IPO Plans
As part of its globalization effort and to achieve its objective of increasing its sales to 2030 by 30 percent Hyundai plans on launching hybrid cars in India. The company has relied on the “premiumisation” drive to sell more expensive vehicles, and it expects that the share of vehicles that cost $18,000 or more will double to 15%. Hyundai as already suggested in its public listing strategy intends to float up to 17.5% of its stake in its India operation. Such a strategy has led to high advertisement margins in India but at the same time, reduction of sales volume.
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