Hyundai to Launch 2-3 Products Every Year, Rakesh Srivastava reveals to CarDekho

Hyundai is a household name in India today, and their cars are doing exceptionally well in the Indian market. Hyundai cars always impress with their stunning design and innovative technology, the reasons behind Hyundai's success in India. Currently, when the Indian automotive industry is facing a slowdown, Hyundai is still making profits here. We recently visited Hyundai's head office in Delhi, in a course to present CarDekho Awards trophies to two of their cars, Hyundai i10 and Hyundai Verna for Most Popular Hatchback 2012 and Most Popular Sedan 2012 respectively. We presented the trophies to Mr. Rakesh Srivastava, Sr. Vice President & Division Head, Marketing and Sales Division and Mr. CH Han, Sr. Executive Director, Hyundai India.

We also got a chance to do an exclusive interview with Mr. Srivastava, where we discussed about the Indian automotive scenario and Hyundai's performance during the slowdown. Mr. Srivastava has confidence in his products, and he is expecting better results in FY 2013-14 as well. He also told us that Hyundai is planning to launch 2-3 new products every year for next 5 year.

Q.1 Indian automotive industry is going through a rough phase; Hyundai India is also facing the heat of this slowdown, while SIAM has already stated that the fiscal 2013-14 won’t be any different. Are you expecting better results? What will be Hyundai's strategy to overcome this?

Ans. The Indian automobile industry is witnessing a difficult phase due to slowdown. The macroeconomic imbalances and the structural weakness of the economy have led to high inflationary trend which has a greater bearing on the economy resulting in low consumer sentiment. We anticipate that the current scenario will continue for few more months until there are some significant changes in the macro-economic conditions.

In the last financial year, the market sentiments were negative as the slowdown in the economy has affected the disposable income. The cost of ownership has gone up with high fuel prices and interest rates. This has suppressed customer enquiry levels and sales volumes. For the financial year 2012-13 (April 2012 to March 2013) the passenger car industry has declined by 6.3%; however in spite of slowdown HMIL has sold 3,83,611 units and increased its market share from 19.2 to 20.2%. We achieved the above by focusing on quality of customer interactions and aggressive marketing campaigns.

To improve our sales volume we increased our geographical reach and depth by increasing our dealership showrooms to 364 and Workshops to 904. Rural sales focus is a core part of our strategy as we have strong brands in the popular segments and to reach the customers we increased the number of Rural Sales Outlets to 268 outlets.

Q.2 Hyundai India is the second largest carmaker in India after MSI. Same as MSI, most of your market share comes from small passenger cars. Now, when the players like Toyota and Honda are stepping in the space, what will be your strategy to sustain/improve your market share?

Ans. The passenger car market in India is largely dominated by compact cars and we expect this trend to continue. However the Sedans, SUVs and MPV segment is also witnessing a steady growth.

We have a strong product line-up in compact car segment to luxury SUV. Our products have been well received by the consumers across the country. Our market share in the passenger car segment is over 19% and we have been able to retain our market share and continue to achieve the growth momentum.

We will be launching new products in these segments and we are confident on the success of our new products because of our continued focus on providing the best in terms of product features, technology, design and after sales services.

Q.3 More and more users come online to research products before they make a buying decision these days, and on an average, they take 45-60 days in selecting a car. So, what is your strategy for such tech-savvy buyers?

Ans. The digital and telecom penetration in India has been growing at a fast pace and hence digital marketing has been an important component in our integrated marketing communication mix. We understand the importance of online research by consumers for making a buying decision related to cars. India has a huge population base comprising youths who are technology savvy and consuming digital content in various forms and hence digital marketing offers an unique platform to reach out to these audiences.

Digital marketing helps in contextual targeting of audience and generate feedback through interactive communication. While we devise our marketing strategy, we analyse the media consumption habits and patterns of the consumers and accordingly integrate digital media in our marketing campaigns. Our fan base in the digital space has been growing significantly and we will continue to enhance our presence in digital media.

Q. 4 Hyundai cars like EON, i10 and i20 are doing pretty well, while Santro, one of your most successful cars is losing numbers. Don’t you think Santro is getting older? Any plans for its facelift or replacement?

Ans. We have no plans to phase out Hyundai Santro. Santro is a very popular car in India. We sell around 4,000 units every month. Santro sells more than some of the new cars in the compact segment.

Q.5 Test mules of next gen i10 have been spotted many times, can we expect it by this festive season i.e. October-November, 2013?

Ans. As a company policy we will not be able to comment on the future products but as already announced, we will launch 2-3 products every year for the next 5 years.

Q.6 Honda Amaze has increased the competition in the Compact Sedan Segment, but strangely, Hyundai doesn’t have any car in this important segment. Swift Dzire, the segment leader is clocking around 2 lakh unit sales annually. Any plans for the segment?

Ans. We are a full line up car manufacturer in India and as a part of our company policy we will not be able to comment on product plans.

Q.7 Another is the utility vehicles, where Hyundai’s presence is minimal. Santa Fe is there, but its sales figures doesn't seem to be impressive. Any plans for new products in the segment? Compact SUVs are doing great at the moment and most of the manufacturers are planning to launch their compact UVs. What are Hyundai’s plans on it?

Ans. Our product introductions are well thought and we introduce products to target strong position in each segment. This has been proved by our products which are segment leaders and trendsetter like i10, 120, Eon, Verna, Elantra.

The UV and MUV markets have evolved in the last 3 years in India. This segment is largely diesel driven. As we had capacity constraints for diesel vehicles and thus our focus was on passenger cars.

This year we had announced an investment of USD300 million in a flexible engine plant. With the addition of this plant we will be able to manufacture both petrol and diesel engines and service the requirements for domestic market and export. This provides us an added opportunity to evaluate UV and SUV segment now. We are studying this segment and will take considered decision based on the market study.

Q.8 Hyundai ‘Moment of Brilliance’ TVC featured Hyundai i30, which was also aired in India, had attracted lot of attention. Are you bringing the hatch in the country? Don’t you think Indian market is now mature enough for hatches like i30?

Ans. As a part of our company policy, we are not able to comment on product plans and strategy.

Q.9 Hyundai India's profit is increasing on YOY basis, but at the same time, its market share has dipped, where you had a 16.8% share in 2010, 14.4% in 2011 and it was 14.8% in 2012, and 13.84% being the latest in March, 2013. What do you think is the reason behind this loss of market share?

Ans. In the last Financial Year, the market sentiments were negative as the slowdown in the economy has affected the disposable income. The cost of ownership has gone up with high fuel prices, high interest rates. This suppressed customer enquiry levels and sales volumes.

In FY 12-13 (April 2012 to March 2013) passenger car industry has declined by 6.3%; however in spite of slowdown Hyundai has sold 383,611 units and increased its market share from 19.2 to 20.2%. We achieved the above by focusing on Quality of Customer Interactions and aggressive marketing campaigns.

The UV and MUV markets have evolved in the last 3 years in India. This segment is largely diesel driven. Due to capacity constraints for diesel vehicles; our focus was on passenger cars. However we continuously study new segments and our future product strategy is based on our regular market research.

Q.10 Looking at the current scenario, where do you see Indian auto industry and Hyundai India 5 years down the line?

Ans. The slowdown of economy is impacting vehicle sales. Against large base of last FY there was a sharp drop in conversion of enquiries in the absence of any positive stimulus and sentiments. We foresee the pressure on volumes to continue till there is significant improvement in macro-economic factors. In the last quarter, Hyundai gained in market share with its strong performance and marketing initiatives as during slow down customers prefer products with higher quality, assurance and aspiration.

We will continue to launch 2-3 products every year for the next 5 years.