Providing mobility services is key and not selling cars, says automaker
Hyundai Motor India Ltd is studying the feasibility of launching a low-cost electric vehicle (EV) for consumers, treating the project as its “No. 1 priority" for the future, managing director S.S. Kim said.
“We have the product and the technology, and we are reviewing the Indian market condition and the infrastructure situation here. We will come up with some options, which will be the best for the Indian market. It’s a No.1 priority in our future strategy," Kim said.
The local unit of the South Korean carmaker will focus on providing mobility services rather than just selling cars, alongside offering digitally connected products to keep pace with changing needs.
Electrification of vehicles will play a key role in the company’s success in India.
“Hyundai Motor Co. is one of the early adopters of electric technology, and we have various electric products. We are also quite advanced in the hydrogen fuel cell vehicle technology. Only Hyundai and Toyota sell these vehicles in the global market," Kim said.
He added that due to the coronavirus pandemic, infrastructure development for electric vehicles got impacted, which, in turn, might delay the project.
“It will be a bit affected, but we are working on it based on our electrification plan and schedules," Kim said.
Despite a sharp decline in vehicle sales in the current fiscal year due to the pandemic-induced economic slowdown, Hyundai has managed to emerge as the market leader in the fast-growing sport-utility vehicle (SUV) segment, overtaking Maruti Suzuki India Ltd, on the back of rising demand for its Creta and Venue models.
The company, however, is still apprehensive that it might take at least two years to cross the 3 million-sales mark registered in FY19.
“It will take two years to come to the pre-covid level of volumes. Personal mobility is still a major part of the demand, and in 2019, the Indian auto industry experienced a sudden fall in demand because of the transition to BS-VI emission norms and credit crunch. So, that led to a decline of around 20%, and that demand is still alive. We expect the pent-up demand to continue till the first half of this year," he said.
The government is expected to introduce the second phase of the corporate average fuel efficiency and real-time driving emission (RDE) test norms by 2022 and 2023, respectively, but the auto industry has been urging it to defer the regulations, saying they impact post-pandemic sales.
“Implementation of the CAFÉ (corporate average fuel efficiency) norms and RDE norms means an increase in material costs, and it will eventually cause price increase as well. We are afraid that it will impact demand and hurt the consumer sentiment. (Auto lobby) Siam has asked for a deferment for two years, and that will be very helpful for us. As a company, Hyundai is ready if the government decides to implement it from the original date," Kim said.