Gurgaon: Hyundai Motor India Ltd may stem falling market share with new entry level small car Eonbut its attempt to weaken MarutiSuzuki India Ltd’s grip on the segment has fallen short on the pricing front, according to dealers and experts.
The car’s base version, priced at Rs 2.69 lakh (ex-showroom, Delhi), does not have air-conditioning or power steering.
Hyundai Motor Co. Eon hatchback is being presented at a news conference in Gurgaon on Thursday. Photo: Bloomberg
“Price positioning is a let down. We expected it be cheaper by at least Rs 20,000,” said a dealer on condition of anonymity at the car’s launch on Thursday. “The car looks good in terms of design and quality, but it will be difficult to pitch the car at this price against the competition.”
Hyundai expects to sell 140,000-150,000 units of the Eon a year, helping increase its market share in the world’s second fastest growing car market.
Maruti’s rival Alto, of which 25,000 are sold a month, starts at Rs 2.35 lakh and the top-end version of the car with air-conditioning, heater and power steering is priced at Rs 2.84 lakh (ex-showroom, Delhi).
“There is a difference of at least Rs 40,000 between the base models of the Alto and the Eon,” said Pradeep Saxena, executive director, TNS Automotive, a marketing firm. “This amount is huge for an entry-level buyer. So, I don’t see a major impact on Alto sales. However, the company will definitely gain market share, at least 5 percentage points. It will chip away volumes from the Alto and (the Chevrolet) Spark. However, some cannibalization with Santro is also expected.”
Models pose with Hyundai’s new Eon at its launch. Photo: PTI
Compacts and mini-cars accounted for at least 75% of the car market in India. While Maruti Suzuki’s market share has dropped to 39% this fiscal, Hyundai accounted for 15.2% of the total cars sold in the first six months of this fiscal compared with 19% last year.
An expert said while Hyundai can bet on its design to attract customers, the two cheapest versions may not get too many customers.
Hyundai Motors India Limited CEO H W Park (2nd from right) poses with the new Eon at its launch. Photo: PTI
“I don’t think people will opt for Dlite and Era at that price point with limited features,” said Mahantesh Sabarad, an analyst with Fortune Equity Brokers India Pvt. Ltd. “I think the effective pricing starts with Magna (priced at Rs 3.36 lakh). We will have to wait and watch the performance of these variants.”
A company official said it didn’t intend to compete on price. “We are not fighting on the price front,” said Arvind Saxena, director, marketing and sales, Hyundai Motor India. “The idea is to offer a good value proposition car in the segment that has some boxy looking cars. We aim to reach younger customers and those who are planning to make their first purchase.”