Hyundai Motor Revvs Up with New SUVs as $3 Billion IPO Nears: Can the Auto Giant Reclaim India’s Market?

Hyundai Motor, once the most successful foreign carmaker in India, is looking to regain its market share from strong domestic competitors. To achieve this, the company plans to launch several new SUVs as it gears up for a $3 billion initial public offering (IPO) in India.

SUV Launches and Electric Vehicle Plans

Hyundai’s plan includes rolling out its first India-made electric vehicle (EV) early next year, followed by at least two new gasoline-powered SUVs by 2026. According to insiders, these launches are part of Hyundai’s strategy to offer higher-margin vehicles in the Indian market, which is now the third-largest car market in the world.

Hyundai’s Market Challenges

Hyundai has long been second only to Maruti Suzuki in Indian car sales. However, the rise of domestic players like Tata Motors and Mahindra & Mahindra, which have introduced popular new SUVs, has eroded Hyundai’s market share. Over the past four years, Hyundai’s share in the Indian market has dropped from 17.5% to 14.6%, while Tata’s share has nearly tripled to 14%.

“Hyundai is in a tough spot,” said V G Ramakrishnan, managing partner at consultancy Avanteum. “The company needs to focus on quickly rolling out new products to maintain its market share.”

Hyundai’s Strategy in India

India is Hyundai’s third-biggest revenue market after 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. During a visit to India in April, Hyundai Motor Group’s Executive Chair Euisun Chung highlighted the company’s commitment to maintaining its position in the market.

Starting in 2025, Hyundai plans to introduce a series of new electric SUVs in India, with four more EVs expected by the end of the decade. The company is also considering turning India into a regional hub for EV exports. Alongside these plans, Hyundai will launch hybrid cars as part of its global strategy to boost sales by 30% by 2030.

The Upcoming IPO

Hyundai’s Indian business is preparing to go public, with plans to sell up to 17.5% of its shares. The company has been focusing on selling higher-priced vehicles in India to increase its profit margins. However, maintaining a balance between market share and margins will be crucial after the IPO, as shareholders will closely monitor the company’s performance.

Despite the challenges, Hyundai achieved its highest-ever sales in India last fiscal year. The company’s journey in India began in 1996, and it found success with affordable hatchbacks like the Santro. As consumer preferences shifted, Hyundai introduced its first locally-made SUV, the Creta, in 2015, which became its best-selling model.

Growing Competition

However, Hyundai’s market share in the SUV segment has decreased, with its share of total SUV sales in India falling from 24% to 19% over the past three years. To regain its position, Hyundai plans to introduce two new gasoline-powered SUVs. One will be based on the Bayon crossover sold globally, competing with Maruti’s Fronx and Tata’s Nexon. The other will be a larger SUV, likely competing with Mahindra’s XUV700.

These new models are expected to add around 120,000 units annually to Hyundai’s sales in India. Last fiscal year, Hyundai sold 615,000 cars in India, with 63% being SUVs. The company also exported 163,000 vehicles from India.

Hyundai’s competitors are not standing still. Tata Motors, the leading EV maker in India with a market share of over 75%, plans to launch five more EVs in the next three to four years. Mahindra also plans to launch seven electric SUVs and six new gasoline-powered SUVs by the end of the decade. Market leader Maruti is focusing on SUVs and hybrids, with plans to launch six EVs by 2031.

“What got Hyundai this far won’t necessarily take it into the future. The competition is more intense now,” said an Indian supplier to Hyundai.