India’s second-largest carmaker will have access to all propulsion technologies, including electric and hybrid, through its parent in Korea (Hyundai Motor Co.), they said.
“The Indian customer is evolving. We believe that the customer does not want to compromise now,” Tarun Garg, the chief operating officer of Hyundai Motor India, told Mint in an interview. “Even (if you see) the first-time buyer behavior, everybody is trying to really move to cars which have design, which have technology, which have space, which have safety, and this is where we want to be.”
The company’s average selling price increased from ₹4.9 lakh in FY19 to ₹6.6 lakh in FY23, growing at a compound annual rate of 7.6%. Hyundai attributed this to a mix of premiumization and a general increase in car prices. During this period, it phased out its most affordable cars in India—Eon and Santro.
Also read | Hyundai’s journey in India has been through SUVs
This bodes well for Hyundai as an evolving generation of car buyers seeks advanced features, technology, styling and larger space over regular hatchbacks.
“The preference of Indian car buyers has consistently been shifting from hatchbacks towards SUVs (sports utility vehicles),” said Gaurav Vangaal, associate director at S&P Global.
“Today, Indian buyers are spoilt for choice, and they seek multiple powertrain options on every car. The differentiator for carmakers will be how many powertrain options they can provide,” he said.
Hyundai is one of the few car companies in India to sell petrol, diesel, CNG and electric cars.
Hyundai’s initial public offering in India is poised to become the country’s largest, taking the crown previously held by state-owned Life Insurance Corporation of India. Mint reported in June that its Korean parent plans to raise $2.5-3 billion at a valuation of nearly $20 billion from the IPO.
Also read | The Hyundai Motor IPO: Why the valuations have taken a reality check
Fuel-agnostic, but focussed on electric
Hyundai will be launching an electric variant of its top-selling model Creta in the last quarter of this fiscal year. Beyond that, the company has prepared a pipeline of three more electric vehicles, aimed at the affordable end of the market. Presently, it sells its luxury EV, Ioniq 5, in India.
While the company sells hybrid cars in various markets, it has stayed away from that segment in India. In fact, along with peers Maruti Suzuki and Toyota, Hyundai is actively lobbying the Indian government to reserve fiscal and tax incentives only for EVs and not extend such benefits to hybrid vehicles.
Also read | Hyundai Motor India IPO set to help parent drive past ‘Korea discount’
“The government is also incentivizing EVs—whether it is through the (concessional) GST structure, the various state government schemes, PLI (production-linked incentive) scheme, and now the latest scheme on the charging infrastructure. So that is why you can see that our focus is also in line with what the government is wanting,” Garg said.
However, Hyundai can bring hybrid cars to India in a relatively short time with the help of its parent if the market shifts in that direction, he said.
Shifting trends
Hyundai’s focus on premium vehicles, however, could be at odds with recent concerns about customer exuberance in India coming to an end.
The resurgence of cost consciousness amongst Indian car buyers is reflected in Hyundai’s weighted average retail price, which fell 17% year-on-year in September, as per data from market intelligence firm Jato Dynamics.
The trend was echoed across the market with only two out of the top dozen carmakers in the market seeing a year-on-year increase in their weighted average retail price in September, Mint reported on Monday.
Also read | Indian automakers shift gears: Affordable, not premium cars in focus
Some experts said that it was too early to call it a shift in consumer preferences. The fall in retail prices can also be partly attributed to the steep discounts being offered by automakers this year that were absent last year, experts said.
Hyundai Motor India’s top bosses say that this is a blip, and if the trend persists they are ready to adapt.
“We have very strong eyes and ears to the ground. In case we find that wherever there is an opportunity in any segment, we will definitely look at it,” Garg said.
Also read | Hyundai’s IPO may inspire other MNCs to list in India for improved valuation, manufacturing benefits
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