Hyundai aims to drive up festive demand with aggressive prices
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The clock is turning back at Hyundai Motor India Ltd with the local arm of the Korean carmaker offering its compact car models Eon and i10 at Rs2.72 lakh and Rs3.88 lakh respectively, or the price they commanded five years ago.
“The i10 and Eon have the lowest price in five years while the Grand i10 and Verna have the highest offers,” said Rakesh Srivastava, senior vice- president, sales and marketing at Hyundai India, adding that “Hyundai models are always high on consideration set of buyers. We would like to offer the best value proposition at the lowest price point for the customers to move from consideration stage to ownership stage.” He conceded that this is by far the most aggressive sales promotion undertaken by the company.
The benefits in a range of Rs10,000 to Rs2 lakh extend across its model lineup from the i20 to the Santa Fe, the premium SUV. He expects an incremental sales growth of above 15% by the end of the current festive season.
This special price offer is the most aggressive stance taken by India’s second largest carmaker to drum up volumes in a market where rival Maruti Suzuki India Ltd is swiftly widening its lead.
The fact that most of its models, with the exception of Creta, and newly launched Elantra and to some extent the Grand i10, have been under pressure, partially explains the sales push. While volumes of compact cars including the i20, Eon and i10, dropped 12%, 2.2% and 27.8% respectively, sales of Santa Fe, Verna and Xcent fell 50%, 11% and 8% in September over the year-ago period. But Srivastava said the offers are “as per the plan” and not a function of increasing competitive intensity or underperformance of the models.
Puneet Gupta, associate vice-president at market research and sales forecasting firm, I.H.S. Markit said, “Hyundai has hit the nail with an aggressive campaign at a right time. It just wants to exploit the opportunity by doling out a sizzling offer and cater to bottom of the market.” He pointed out that these schemes come against the backdrop of pay rises from the 7th pay commission recommendations that are expected to lead many salaried government employees to buy cars in the A and B segments.
Additionally, a good monsoon which has led to a rush of buyers from rural markets. “These schemes will definitely click and help Hyundai in increasing their market share in Indian market,” said Gupta.
The move by Hyundai, added Gupta, reflects the company’s intent to woo buyers for its entry level cars at a time when Maruti—in a departure from the previous strategy—is focussing on the premium end of the market with its best selling Brezza compact SUV and Baleno hatchback. Just as they do every year during festive season, others too are wooing buyers with attractive schemes. But what makes Hyundai stand out in the pack is the extent of the benefits.
Some analysts said sales promotions are lower this year because, unlike in the previous year, there’s a strong demand for models that are not doing well. “Promotions undertaken are indeed low key, as a significant number of automobile manufacturers have not jumped onto the promotion bandwagon,” wrote analysts Mahantesh Sabarad and Deep Shah in a 13 October research note on festive promotions. Monthly sales of passenger vehicles (PVs) in September were the highest in terms in more than four years. Passenger vehicles sales during the month rose 20% to 278,000 units over a year ago, according to the Society of Indian Automobile Manufacturers.