Back'Aura will be only 1.2-liter BS-VI diesel car in compact sedan segment': S S Kim, CEO and MD, Hyundai Motor India Ltd
‘When we designed and developed Aura, it was based on the Indian market feedback. However, Aura will be a global product.’
PremiumMUMBAI : India’s second largest carmaker Hyundai Motor India Ltd (HMIL) plans to consolidate its position in the sub-four meter sedan segment, where it ranks behind Maruti Suzuki and Honda Cars India. It is eyeing a chunky portion in the category that would be left vacant by Maruti once it quits diesel under BS VI regime from April 2020. Maruti sells over 16,000 units of its Dzire compact sedans per month, of which the diesel models contribute 35%-40%.
Hyundai has now unveiled its all-new compact sedan named Aura, which will be offered in three BSVI-compliant engine options – 1 and 1.2-liter petrol and 1.2-liter diesel, and a CNG variant too. It will be officially launched next month.
Hyundai Motor India’s S S Kim spoke to Mint on December 19 on the model’s strategy and positioning, focus areas, and dealer financing. Excerpts:
The sub-four meter cars have grown more than double in market size in last 10 years but continue to comprise 60% of total passenger vehicles sold in India. Will Hyundai continue to focus on this segment going forward?
Yes, we will continue to focus on the sub-four meter category. The customer can derive tax benefits for sub-four meter cars in India, which makes it a viable solution. Also considering the road conditions, traffic and parking related issues, I think sub-four meter cars are very reasonable for this market.
However, the young customers are looking at many innovative features in the same segment such as bluelink (artificial intelligence enabled features for connectivity and safety), wireless charger, air purifier and others. Packaging these features help us maintain our premium perception amongst customers.
Isn’t the compact sedan segment a very India-specific phenomenon?
When we prepared the basic product concept, designed and developed Aura, it was 100% based on the India market feedback and customer requirements. However, Aura will be a global product wherein it will be exported as well.
How are the Hyundai dealers placed now in terms of available financing options?
We have improved a lot lately. Our dealers too have faced the same situation that the industry has seen over the past year. As an OEM, we have implemented various measures. I have personally visited Mumbai many times this year to meet the bankers to present our long-term plan, product roadmap and investment plans.
Its not that the bankers are averse to lending to the auto industry but because of the current market situation, they have devised certain new (lending) principles that they have introduced. The finance minister has also given impetus to the banking structure and that’s why you see that now the banks have started holding many camps offering loans to strong players.
During my interactions with the bankers, I suggested the management that we could set up new protocols and processes acceptable for both the parties (banks and the auto dealers). A lot of dealers were found to be diverting funds, raised as loans for auto, into other areas. That’s one of the reasons why banks were not happy with the automobile business but this is improving now.
What is the status of liquidation of BS IV stock?
We very closely monitor the dealer stock situation and the BS VI transition is already reflected in our production plan (for Q4FY20). However, if the customers want BS IV models, we can still increase their production volume. But in many cases the dealers are worrying about liquidation. So we continue to monitor the dealer demand with our production plans.
What is it that Hyundai is aiming with the all-new compact sedan Aura?
I don’t think that Hyundai Xcent has performed strong enough to compete with Maruti Suzuki Dzire and Honda Amaze in terms of volumes and customer perception. The existing Xcent model just focuses on the fleet segment but does not appeal to the buyers for personal segment. So we felt that we must develop a strong product that can appeal to this segment, which is large in size and has seen stable demand over years.
What kind of volumes do you expect from Aura within first year of its launch?
I won’t comment on that but will give you an idea of what we are expecting. Maruti sells about 15,000 Dzire cars per month and Honda sells 5,000 Amaze models per month. Although we are the second largest carmaker in India, our presence in this segment is not strong. We want to build it and our volume plan is based on that strategy.
The 1.2-liter ecotorq diesel variant of Aura will fill in for the demand that will be left vacant by the other car manufacturer under BS VI mandate. With that, this will be the only 1.2-liter BS VI diesel engine in the compact sedan segment. That’s also a sweetspot going forward for us.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
