Hyundai to focus on Indian domestic market

Hyundai Motor India, the largest car exporter in India, plans to increase its focus on the domestic market. Hyundai Motor India’s new managing director and CEO H.W. Park has indicated that the company’s biggest priority is to increase domestic sales.

Photo: Hyundai Santa Fe, possible launch in 2010

Hyundai Motor India has been facing falling export realisations and reduced orders from a dwindling international market.

While Hyundai Motor India has a 50:50 ratio on domestic to export sales currently, the company intends to increase domestic sales to 60% by the end of 2010.

“We now need to zero in on the domestic market with aggression, so that our overall production does not get ramped down. We are focused on our products, customer services, brand promotions and dealership network to take on the competition,” Park said.

“We are also keen to maintain our 21 per cent market share and production will be adjusted accordingly to take advantage of the buoyant demand,” he added.

Park also said that Hyundai will launch the right products at the right time and will continue to focus on the compact car segment, which holds more than 75 per cent of the passenger car market in India. The company also plans to increase its market share in the sedan and premium car segments.

Hyundai Motor India will also launch a small car, one which is smaller than the current Hyundai Santro, which is running on Indian roads right now.

Hyundai has already invested Rs 800 crore in its small car project.

Hyundai Motor is also conducting a feasibility study for development and production of small diesel engines.

Regarding the feasibility study being conducted on small diesel engines, Park said there was no immediate plans to set up a facility for the same. The company wants to develop a small diesel engine, though it has a  1.1-litre diesel engine currently in its ranks.

The setting up of such a facility for the diesel engine is sure to require mega-investments and the company, it seems, is not yet sure if there’s a big enough market in India or anywhere else in the world which can meet the requirements.

If Park’s plans for India work out, Hyundai Motor’s sales in India might well surpass that of China. At present, sales in India account for only 15-17% of the group’s total sales. The company currently sells eight vehicles in India starting from the low-end hatchback Santro Xing, the more sophistcated i10 small car, the i20 premium hatchback, the low-end sedan Accent, the mid-size sedan Verna, the premium car Sonata Transform and the SUV Hyundai Terracan. A new SUV – the Hyundai Santa Fe – is likely to be launched in 2010.

In order to cater to the growing European demand, some of the production of Hyundai i20 might be shifted to Turkey. Regarding Hyundai’s medium-sized car Getz, Park said it is being phased out in India.

The Hyundai Getz has recorded sales of around 1200-1300 units per month.