Hyundai Faces Tough Competition from Tata and Mahindra Ahead of $3.5 Billion IPO

Hyundai Under Pressure from Tata and Mahindra as IPO Approaches

Tata Motors and Mahindra & Mahindra are closing in on Hyundai’s position as the second-largest carmaker in India, just as Hyundai prepares for a $3.5 billion IPO of its local unit.

Sales Competition:

• Hyundai sold 13.5% of all passenger cars in India last month.
• Tata Motors sold 13.2%, and Mahindra sold 12.4%.
• Maruti Suzuki remains the top carmaker with a 40% market share.

This competition is intensifying as Hyundai Motor India plans to gauge investor interest for an IPO expected in September or October, which could be one of Asia’s biggest in recent years.

Hyundai’s Strategy:

• CEO Unsoo Kim highlighted Hyundai’s leadership in various categories.
• COO Tarun Garg noted the challenges for foreign automakers in India.
• Hyundai is investing 200 billion rupees ($2.4 billion) to develop electric vehicles and 70 billion rupees to operationalize a second plant by the end of 2025.

Future Plans:

• Hyundai plans to launch an electric version of its popular SUV, Creta, in early 2025.
• Tata Motors aims to expand its EV lineup with 10 new models by fiscal 2026.
• Mahindra plans to invest 270 billion rupees in the next three years to increase SUV and EV production, with plans to launch nine new SUVs and seven EVs by 2030.
• Maruti Suzuki, the market leader, currently has no battery-powered cars.

Deven Choksey of KR Choksey Shares & Securities noted that Hyundai’s potential loss of market share could be due to its product range, while Tata Motors and Mahindra offer appealing designs and competitive prices, making them strong competitors in India.