Hyundai eyes record sales in 2022 on robust demand

The second-largest carmaker, Hyundai Motor India, expects to log its best-ever sales in the domestic market this year, by leveraging sustained demand for the new sport utility vehicles (SUV), the Venue and Tucson, as well as its flagship mid-sized SUV Creta.

The local arm of the South Korean auto major is stepping on the gas to retain its number two spot in the domestic market and increase production as chip supplies eased just before the festivals. Hyundai expects to surpass the record sale figures it had logged in 2018-19 at just over 500,000 units.

The company’s production ramp-up effort is in line with other domestic original equipment manufacturers, who are also expected to hit peak output levels this year as supplies of semiconductors and other components improved following two years of massive covid-led disruptions.

While channel inventory is just over 200,000 units, back orders are well over 700,000 units, leading to waiting periods of several months for some models. For Hyundai, pending booking was at 130,000 units.

Hyundai was in a tight race with rival Tata Motors, at the number 3 spot, as its production between January and May suffered due to the supply-side challenges. However, easing semi-conductor chip availability has led to a 10% increase in production over the last three months. “From January to May we were able to produce 43,000-44000 units a month. We are now hovering around 49,000 units so there has clearly been a 10% increase. We hope that we can continue this momentum but not all the pain is gone yet. We are mindful that there is a scenario of high interest rate and elevated inflation levels. But the healthy number of back orders and sustained demand in the festive season is a positive factor. Customers will now be able to take deliveries of vehicles in the festive season as supplies improve”, Tarun Garg, director, sales and marketing, Hyundai Motor India, said in an interview.

Last year, the festive season had started with ample inventory in distribution channels, and as India emerged from a devastating second wave of covid, it had led to a significant jump in festive season sales, Garg said. Inventory levels are currently at 15-17 days.

The company is also betting big on expanding its premium performance range of N Line models to boost its sales in the niche segment of customers who prefer a sportier avatar of the carmaker’s standard product offerings. Hyundai started offering the N Line in India with the i20 in 2021. It expects to sell 10,000 units of Venue N Line next year, apart from the nearly 6,000 i20 N Lines that it sales in a year.

“More than the volumes, the N Line is our attempt to move towards the vision of premiumization of offerings. You can see it with the Tucson. We would sell around 1,000 units every year, this year we already have 5000 bookings,”he said.