Hyundai Gears Up for $3B IPO with New SUV Rollout to Challenge Domestic Rivals Like Tata Motors and Maruti Suzuki

Hyundai Motor, a top foreign carmaker in India, is planning to regain its market share by launching new SUVs, as competition from Indian car manufacturers intensifies. This comes as Hyundai prepares for a $3 billion public listing in India.

SUV Rollout to Start with Electric Vehicle

Hyundai’s SUV rollout will kick off with its first India-made electric vehicle (EV) early next year. The company also plans to introduce at least two new gasoline-powered SUVs designed specifically for the Indian market by 2026, according to sources familiar with the plans.

This strategy is part of Hyundai’s broader effort to offer higher-margin vehicles, which aligns with its plans for its first public listing outside of South Korea. The company sees strong potential in India, the world’s third-largest car market, especially as its presence in China declines and sales in its home country slow down.

Hyundai Faces Rising Competition

Hyundai’s sales in India have been strong, second only to Maruti Suzuki. However, Indian companies like Tata Motors and Mahindra & Mahindra are gaining ground with their new SUVs, which are currently the most popular type of vehicle in the market. This increased competition has reduced Hyundai’s market share in India from 17.5% four years ago to 14.6% today. Meanwhile, Tata’s share has nearly tripled to 14%, and Toyota’s has risen to 6%.

Hyundai’s Investment in India

India is Hyundai’s third-largest market globally, following the U.S. and South Korea. The company has already invested $5 billion in India and plans to invest another $4 billion over the next decade.

Hyundai’s Executive Chair, Euisun Chung, expressed confidence in the Indian market during a visit in April, stating that the company is proud to hold the second-largest market share in such a vibrant market and aims to strengthen its position as a premium brand.

Future Plans Include More EVs and Hybrids

In 2025, Hyundai will introduce its India-made electric SUV, followed by four more EVs by the end of the decade. The company is also considering making India a hub for EV exports. In addition to EVs, Hyundai will launch hybrid vehicles in India as part of its global plan to boost sales by 30% by 2030.

Hyundai’s focus on selling higher-priced vehicles has been successful. The percentage of its cars priced at $18,000 or more, considered premium in India, doubled to 15% between 2021 and 2023.

Balancing Market Share and Profit Margins

Hyundai plans to sell up to 17.5% of its Indian business shares to the public as part of its strategy to continue “premiumisation,” which has helped the company achieve some of the highest profit margins among its peers in India. However, maintaining a balance between market share and profit margins will be crucial after the listing.

Despite its shrinking market share, Hyundai achieved its highest-ever sales in India in the last fiscal year.

Intensifying Competition in the SUV Market

Hyundai entered India in 1996 and initially found success with affordable hatchbacks like the Santro. However, as customer preferences shifted, Hyundai launched its first locally-made SUV, the Creta, in 2015, which became a major success. The Creta, priced between $13,000 and $24,000, is now Hyundai’s best-selling model in India.

Currently, Hyundai offers eight SUVs out of its 13-car portfolio. However, its share of India’s total SUV sales has dropped from 24% three years ago to 19% last fiscal year.

Hyundai’s two new gasoline-powered SUVs will be key to its strategy. One will be based on the Bayon crossover sold in global markets, competing with models like Maruti’s Fronx and Tata’s Nexon. The other, larger than the Creta, will compete with Mahindra’s XUV700. Together, these new models are expected to add around 120,000 units to Hyundai’s annual sales in India.

Rising Competition from Rivals

Hyundai’s competitors are also ramping up their offerings. Tata Motors, the leading EV maker in India, plans to launch five new EVs over the next few years, bringing its total to 10. Mahindra plans to introduce seven electric SUVs and six new gasoline-powered SUVs by the end of the decade. Maruti Suzuki, the market leader, is also focusing on SUVs and hybrids, with plans to launch six EVs by 2031.

An Indian supplier to Hyundai noted that the company will need to innovate to stay competitive as the market becomes increasingly challenging.