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

Evo India - - RADAR -

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.

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