Hyundai to take on Maruti with four new launches

Hyundai Motor India Limited (HMIL), India’s second-largest passenger vehicle manufacturer, is considering introducing an entry-level sedan to take on the Maruti Suzuki DZire and the Honda Amaze. The new product, a study for which is underway in the market, would be developed as a replacement for the Hyundai Accent.

Recently, the Korean automobile major had phased out production of the Accent, which saw sales fall 66.8 per cent to 2,931 units in the last financial year, in an otherwise bullish category.

Rakesh Srivastava, senior vice-president (sales & marketing), HMIL, said, “The entry-level sedan segment is one of the fastest growing ones in the Indian market. We are studying the possibilities of a product intervention in the category.” As many as 2,26,502 entry-level sedans were sold in the country in 2012-13, a 21 per cent rise compared with 1,87,026 units in 2011-12. In the same period, the passenger car industry contracted 6.69 per cent to 1,895,471 units.

For FY13 in the passenger vehicle segment, market share of Maruti Suzuki was 39.1 per cent, and Hyundai’s 14.3 per cent.

Currently, Hyundai doesn’t have any product in the entry-level sedan segment in its global portfolio. It is evaluating opportunities to develop a new sub-four-metre sedan to take on heavyweights such as the Maruti Suzuki Dzire, which accounts for three out of every four cars sold in the category. The Dzire is priced between Rs 4.92 and Rs 7.5 lakh (ex-showroom, Delhi).

The new sedan would qualify for the excise duty benefit enjoyed by small cars in India. This would enable Hyundai to price the car aggressively in the Indian market. Currently, any car with a petrol engine capacity of less than 1,200 cc or diesel engine under 1,500 cc, but length shorter than four metres attracts excise duty of 12 per cent. Bigger vehicles attract excise duties of 27 and 30 per cent.

The company is also gearing up to launch a new compact car, code named BA, in September. It expects to sell 2,00,000 units of the BA a year. The model has been designed to challenge the Maruti Suzuki Swift. With sales of 1,84,897 units in 2012-13, Maruti Suzuki Swift is the second-largest selling passenger vehicle in India. Hyundai BA would have the company’s 1.1-litre diesel engine, to be manufactured at Hyundai’s coming engine facility in Chennai. It would also have a 1.2-litre petrol engine option.

On the cards are also a compact sports utility vehicle and a multi-purpose vehicle, slated to be launched in India by 2015. These products would be positioned in the fast-growing utility vehicles segment, which beat market blues to record a 52 per cent rise, selling 5,53,660 units in 2012-13.

Srivastava said, “Last year, we improved our market share in the passenger car segment to 20.2 per cent. Our main aim is to generate volumes by consolidating our existing brands, evaluating the market for entry into newer segments, with product interventions, and strengthening our reach by increasing our sales and service network, especially in rural areas.”

Proposed Models from Hyundai Motor India Limited over the next three years Competing models from Maruti Suzuki India Limited Entry level sub-4m sedan to replace Hyundai Accent (under study) Maruti Suzuki DZire, India’s third largest selling passenger vehicles averaging monthly volumes of 14130 units in FY13 Premium hatchback BA (scheduled launch in September 2013) Maruti Suzuki Swift, India’s second largest selling passenger vehicle averaging monthly sales of 15408 units in FY13 Compact SUV (under development)

Hyundai had unveiled concept SUV Hexaspace at the Delhi Auto Show in 2012
  Compact SUV (under development)
Maruti Suzuki had unveiled concept SUV XA Alpha at the Delhi Auto Show in 2012 Multi-purpose vehicle (under development) Maruti Suzuki Ertiga, displaced Mahindra Scorpio last year to become the third largest selling UV in the country