New Delhi: With the Indian small car market slated to get more crowded in the next few years, Hyundai Motor India Ltd aims to aggressively defend its market share, its newly appointed chief executive H.W. Park said.
Rivals General Motors India Pvt. Ltd, Honda Siel Cars India Ltd and Volkswagen India Pvt. Ltd have announced plans to launch small cars in the next couple of years, challenging Maruti Suzuki India Ltd, Hyundai India and Tata Motors Ltd on their bread-and-butter models.
“Our No.1 priority is domestic market sales,” said Park, who took over the company’s top job earlier this month. Hyundai, India’s second largest car maker, has a 21% market share, according to industry lobby group Society of Indian Automobile Manufacturers, or Siam.
New priority: Hyundai Motors India chief executive officer H.W. Park says the auto maker will aggressively defend its market share. Rajkumar/Mint
Soaring local sales, which led to a shortage of production capacity in October, prompted Hyundai to reduce the number of cars it exports as it rushed to meet demand within the country. Exports slumped 12% to 23,435 units, while the company sold 8,294 more units in India, compared with the year-ago period.
Park expects the firm to export around 40% of its production next year. It now ships abroad one in every two cars it produces at its plant in Sriperumbudur, Tamil Nadu.
Recent labour troubles at its factory are unlikely to shake its commitment towards India as the company’s small car export base, Park said. Hyundai recently signed a three-year wage settlement with its workers.
With small cars accounting for 78% of the 1.4 million passenger vehicles sold in India, Hyundai said it is on track to launch a car smaller than its entry-level Santro model. It expects the first of those cars to roll out in 2011. The car would, however, not be priced as low as the Tata Nano. “We can’t build another Nano,” said Arvind Saxena, senior vice-president, sales and marketing.
Saxena said he expects sales to grow at the same pace as the industry, at 13-14% this calender year.
Growing sales and exports have resulted in the company contributing a higher share to parent Hyundai Motor Co.’s revenue.
Park, who earlier oversaw the finance function at Hyundai Motor India, estimates its contribution to the South Korean auto maker’s revenues at 15-20%.