Y K Koo
As Hyundai celebrates 20 years in India, we speak to the MD and CEO of Hyundai India on the company’s past, present and future
WHAT DOES THE 20 year milestone mean to Hyundai ? These 20 years have been a great journey and a big milestone for Hyundai in its global operations. In such a short span we have become the largest automobile exporter and the second largest car manufacturer in India with sales of over 4.7 million vehicles in the domestic market and exports of over 1.6 million vehicles. Hyundai India is a very important part of HMC’s global operations. Our learnings here are helping us make key decisions at a global level and in other emerging markets. It is also a big milestone for you since you were on the launch team 20 years ago.
This is my third stint with Hyundai India. It gives me immense pleasure and a sense of pride to celebrate this milestone. With this milestone, we want to become the most loved and trusted brand in India. We aim to offer customers a brilliant experience through Hyundai products and services.
Looking back, what would be the key milestones?
Over 20 years, Hyundai has had several successes to its credit in India. Defining moments like the launch of the Santro, which was a gamechanger. A total of 18.5 lakh Santros were sold in domestic and export markets. Hyundai is the only carmaker in India to win 4 Indian Car of The Year (ICOTY) awards of which three are in a row in 2014, 2015 and 2016. The Grand i10, Elite i20 and Creta have redefined their respective categories. Hyundai was the first company to introduce the MPFI and CRDi technology in India.
You’ve taken 20 years to reach the five lakh sales mark. What are your predictions for the next 20 years? Hyundai is committed to introducing two new products in India every year till 2020. We grew 16 per cent last year while the industry grew at 8 per cent. We will continue to win the customer’s trust and will service this market with the momentum that we have already built. Over the next two decades, apart from being a great place to work, we want to become a more trusted, loved and a more premium brand.
How is India seen in the group in the global scheme of things?
We are the third largest automobile market for Hyundai after China and
the US. Hyundai India contributes almost 13 per cent to Hyundai Motor Company. With government driven programs like Make in India, India is fast becoming a global hub for manufacturing. We will continue to play a key role in global operations.
Hyundai’s first car, the Santro was a runaway success. Plans to bring the brand back?
The Santro was introduced here nearly 18 years ago. The vehicle enjoyed great success and was instrumental in establishing Hyundai’s credentials as a manufacturer of quality in the hearts of millions of Indian families. We believe that the product has lived its utility and we will continue to bring innovative customer centric products to India and continue to win the customers’ hearts.
Hyundai has had its share of hits and misses. Have you figured out the Indian car buyer well now? Definitely, being the second largest car manufacturer in India is evident that we do understand the Indian consumer well. We also understand that it is an ever evolving journey. We will continue to focus and bring customer satisfaction with our products and services to this market.
Hyundai is challenging Maruti Suzuki in smaller cities now. Your dealerships are probably shifting more cars per showroom.
We are continuously working to penetrate into the rural markets. Various rural focussed activities are being conducted for brand building and sales, resulting into conversions. Special customised schemes for farmers, traders and panchayat members are offered for their convenient buying process. We have tied up with Gramin Banks to facilitate easier finance options. We are enhancing our reach by increasing sales and service network in the rural markets. Further we also provide car test drives with select financiers at their branches or at prominent locations of that area.
The rural market customers have a very stable income and positive cash flow. Customers of these brands have a strong preference for brands that are tried and tested.
Currently there are 270 Rural Sales Outlets (RSOs) and the plan is to increase it to 350 by the end of this year supported by a strong service network. RSOs are built in tier 3 cities to achieve maximum penetration. In the last two years there has been a noticeable upward sales trend. Around 46 per cent of Eon, 21 per cent of i10 and 14 per cent of i20 sales came from these rural and semi-urban markets.
How about launching the Genesis brand in India. Speculations have been on for a while but we haven’t seen any concrete plan yet.
To become a more premium brand, we have to upgrade our product portfolio. Already our average price has gone up from `4 lakh to `7 lakh thanks to the Creta and i20. Of course we cannot disregard the entry level segment. We will work with a full line up of products and if we can succeed in the mid and premium segment, by 2020 we will evaluate the market and based on market research, we will see the possibility of bringing the Genesis to India.
Do you think hybrids will become mainstream models or will it take a lot longer?
We will evaluate the market and based on the results, we would see the possibility. However, we plan to introduce mild hybrid in some of our current models by 2017-18.
Hyundai hasn’t succumbed to the AMT race. Is that a conscious decision to stay away from this? We already have automatic transmissions in Grand, Xcent, Creta, Verna, Elantra & Santa Fe. And we have recently introduced Creta petrol 6-speed automatic after witnessing a huge demand for the product. The diesel version is already in high demand. We have evaluated the importance of AMT in India and we would like to launch AMT in near future in India based on the market demand.
As your portfolio grows, do you think Hyundai could adopt a dual showroom brand strategy like Nexa is for Maruti?
We are already enhancing the premium experience by upgrading the dealerships to Hyundai's Global Dealership Space Identity (GDSI) program. By the year-end, 140 dealerships will be GDSI ready and by 2018 all Hyundai dealerships in India will incorporate GDSI.
With the Creta, Hyundai have finally cracked the SUV market. When do we see the Tucson and the sub 4-metre compact SUV?
By bringing the Tucson to India later this year, we are filling the space between Creta and Santa Fe. It has been extremely successful in global markets and it will set a trend in the premium SUV segment and create a new benchmark. The new sub 4-metre compact SUV is in development stage and will take some time to enter the market.
Expansion plans? When do you run out of capacity and your plans to produce more?
Hyundai Motor India has made an investment of `21,500 crores in the country till date. Our manufacturing facility in Chennai has a production capacity of 6.8 lakh units a year and the capacity can be expanded to over 7.1 lakh units annually. This year we plan to reach 6.6 lakh cars. We have adequate capacity to meet the demand for our existing as well as new products in India.