To cater to the strong demand for diesel vehicles in the Indian automobile market, Korean car maker Hyundai Motor India Ltd (HMIL) on Monday launched an executive sedan, Elantra, in petrol and diesel variants, while also deciding to boost import of diesel engines.
The Elantra is priced between Rs 12.51 lakh and Rs 15.8 lakh (ex-showrrom, Delhi).
“In sedans where both petrol and diesel variants are available, over 80 per cent of sales come from diesel variants. With the Elantra, we now have a complete line-up of cars in India. The diesel version of the Elantra is being introduced only in India to help us meet the requirement in the domestic market,” said Shar Rukh Han, executive director, HMIL.
Though the company ruled out the possibility of setting up a diesel engine plant in Chennai in the immediate future due to uncertain fuel pricing policy of the government, Han said HMIL would increase imports by over 20 per cent to meet the demand for diesel vehicles in India. The company is looking at importing around 13,000 diesel engines from Korea for the four vehicles it offers in the fuel option. Hyundai currently offers diesel variants of premium hatchback i20, sedan Verna and sports utility vehicle Santa Fe.
The company had increased production capacity of diesel vehicles by 50 per cent in April this year to 10,500 units to ease supply of diesel cars to Indian consumers.
Additionally, Han said the company was exploring the possibility of strapping on the 1.1 litre diesel engine it had in its global portfolio on smaller cars in India. But he declined to specify any timeline for launching these cars in the India.
Petrol is 66 per cent costlier than diesel which has made an increasing number of consumers opt for diesel vehicles despite an initial premium of Rs 1-1.5 lakh payable of such models. In the last financial year, sales of diesel vehicles increased by 35 per cent to account for 47 per cent of the passenger vehicle industry. Sales of petrol models declined by 15 per cent in the period.
Rakesh Srivastava, vice-president-national sales, HMIL, said: “Last year, diesel models contributed 17 per cent to our overall volumes, which has now increased to 22 per cent. While most automobile makers are losing market share, we are trying to balance sales of both petrol and diesel cars and grow steadilyby introducing new models. So far we have grown by 10 per cent to sell 234,942 units this year.”
The Elantra, which is pitted against the likes of Toyota Corolla Altis and Chevrolet Cruze, has already registered around 750 bookings.
Though the company declined to share sales target for the car, Srivastava added: “The segment is sized around 2,800 units every month. We would want to have leadership in the category.” The company had phased out the fourth generation Elantra in August 2007. HMIL has invested Rs 200 crore to manufacture the fifth generation model in India.
According to industry estimates, Indian car makers increased production capacity of diesel vehicles by over 35 per cent to 1161,000 units in the last financial year, compared to the year before. Petrol vehicle manufacturing capacity in the domestic industry was rationalised by 12 per cent to 1754,000 units during the same period.