Hyundai eyes further gains in domestic market with SUVs ruling the roost

New Delhi: Hyundai Motor India expects its SUV range to gain further traction in the domestic market with demand for personal mobility gaining momentum post the second wave of COVID-19, according to a senior company official.

The company, which already leads the SUV space with models like Venue, Creta, Tucson and recently launched Alcazar, is looking to maintain its lead in the segment which is growing with each passing month.

“The strong trend towards SUVs continues in the domestic market. The share of SUVs in the overall passenger vehicle segment is increasing with each passing month. In July, the SUV penetration was over 37 per cent and in the January-July period it was around 36 per cent, so the trend is clearly visible,” Hyundai Motor India Ltd (HMIL) Director-Sales, Marketing, Service Tarun Garg said.

He noted that the company has seen its SUV sales go up consistently in the domestic market and now its new offering Alcazar is also helping it shore up additional volumes.

“The way things are, it seems that due to this shift towards personal mobility the demand is coming back very strongly post the second wave of the COVID-19 as was witnessed after the first wave. This time around the demand is coming from both urban and rural areas. After the first wave it was mainly the rural regions which were generating the demand,” Garg said.

He said that Alcazar, which was launched in June this year, has been able to generate additional volumes for the company without affecting the offtake of Creta in the market.

“There has hardly been any cannibalisation of Creta sales. So this is important because if we look at the numbers last year for Creta we used to do around 8,000 units per month and SUVs in all used to do around 15,000 units. In Q1 this year we have moved to over 12,500 units for Creta and the total SUV sales have gone up to 23,800 units. Further, in July, the total SUV sales have crossed the 24,000 units mark,” Garg stated.

Last month, Creta sales were at around 13,000 units and on top of it Alcazar chipped in with about 3,000 units, he said.

“So there has been no cannibalisation so far. So we think Alcazar would be able to bring in new customers to the company fold. So the initial trends are very very encouraging and we have received over 14,000 bookings for Alcazar so far,” Garg noted.

Over 65 per cent of the customers have opted for diesel trims in Alcazar, he added.

“As per our findings, Hyundai petrol customers on an average drive 10,000 kilometres in a year. On the other hand, diesel customers drive over 20,000 kilometres on average… thus fuel efficiency becomes a very important criterion with prices going up…also the price difference is low between our petrol and diesel trims so there is a good demand for diesel variants,” Garg noted.

There are certain states like Madhya Pradesh, Uttar Pradesh, Andhra Pradesh, Maharashtra Punjab and Haryana, where traditionally diesel vehicles sell more, he added.

Elaborating on the successful run of the company in the country so far, Garg noted that the automaker has benefited because it has understood the needs of the customer and accordingly added country-specific features to its product portfolio.

Besides, offering customers the choice of both petrol and diesel powertrains along with class-leading features and technology has helped the company strengthen its position in the highly competitive market, he added.

“One trend which is clearly coming out is that the customers are really looking for feature-loaded cars. They want all kinds of features in their cars because they are utilising personal vehicles to travel more and more. Earlier people used to take a flight or a train but now they prefer going by their own cars,” Garg said.

He noted that the idea is to connect with the customer.

“We just don’t bring a simple global model into the country. We really focus on India-specific features and that is what we try to bring in and that is really what helps whether it is the ventilated seats and wireless charger. We brought in the Bose music system considering the importance Indians give to music while on the move. So, the point here is every which way you look at it, it is about trying to really understand the customer first and then bringing on India specific features in our cars,” Garg stated.

When asked about the semiconductor shortage, he said that the company so far has been able to manage the situation by closely working with suppliers.

“Secondly, we are flexible with the production process… which gives us the flexibility to really either change our production plan or introduce some trims,” Garg said.

Garg said the waiting period for Alcazar stood at around 8-12 weeks and for Creta even more.

“We are not happy with long waiting periods and obviously want to reduce them for the customers,” he added.

On taking a price hike to minimise the impact of rising commodity prices, Garg said: “It is a cause of concern for everyone in the industry. Yes, we need to pass it on to the customers. There is no way we can prevent this because the commodity prices have really really gone up.”

He, however, did not share details.