Hyundai Motor India, the country’s second-largest carmaker, is betting big on premium cars and electric vehicles (EVs), supported by the technology of its parent company, Hyundai Motor Co. in Korea.
Customers Want More Features
According to Tarun Garg, COO of Hyundai Motor India, Indian customers are evolving and want more than just basic cars. “First-time buyers are looking for cars that offer better design, technology, space, and safety,” he told Mint in an interview.
The company’s average selling price rose from ₹4.9 lakh in FY19 to ₹6.6 lakh in FY23, growing at an annual rate of 7.6%. Hyundai says this growth is due to more customers choosing premium models and an overall increase in car prices. Over this period, Hyundai also stopped selling its more affordable models like the Eon and Santro.
This trend of moving towards premium cars, especially SUVs (Sports Utility Vehicles), aligns with the growing demand from Indian buyers for advanced features and multiple powertrain options, such as petrol, diesel, CNG, and electric.
Hyundai’s Upcoming IPO
Hyundai Motor India is gearing up for its initial public offering (IPO), which is expected to be the biggest in India, surpassing the one by Life Insurance Corporation of India. The IPO is expected to raise between $2.5-3 billion at a valuation of around $20 billion.
Focus on Electric Vehicles
Hyundai is committed to electric vehicles and plans to launch an electric version of its best-selling SUV, Creta, by the end of this fiscal year. The company has also planned to introduce three more affordable EVs in the future.
Currently, Hyundai sells its luxury electric vehicle, the Ioniq 5, in India. While it has hybrid models in other countries, Hyundai has not launched hybrids in India yet. Instead, it is pushing the government to give incentives only for fully electric vehicles, not hybrids.
“The government is encouraging EVs with schemes like the concessional GST structure, state government benefits, and the production-linked incentive (PLI) scheme. That’s why we are focusing more on EVs,” Garg said. However, Hyundai can easily introduce hybrid cars if the market demand changes.
Changing Market Trends
Hyundai’s focus on premium cars comes at a time when some experts are concerned that Indian buyers might start preferring more affordable options. Recent data shows a 17% drop in Hyundai’s weighted average retail price in September, reflecting growing cost-consciousness among buyers.
While this shift may indicate a change in preferences, Hyundai’s top executives believe it could just be a temporary situation due to the heavy discounts offered by carmakers this year. They are ready to adjust if this trend continues.
“We are always monitoring the market closely. If we see any opportunity in other segments, we will consider it,” Garg added.
Hyundai’s upcoming IPO and focus on premium vehicles and electric cars demonstrate its confidence in India’s evolving automotive market, despite potential changes in customer preferences.
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