Last week, Maruti Suzuki Chairman RC Bhargava stated that the reduction in GST rates has fueled the revival of small cars, proving wrong the perception that Indian consumers have shifted to aspirational and larger segments, and some automakers are expected to overhaul their product mix.
Hyundai Motor India Chief Operating Officer Tarun Garg, who will take over as Managing Director and CEO from January next year, cited data showing that it is SUV sales that have grown after the change in GST rates.During January-August this year, the share of hatchbacks in total passenger car sales was 22.4 percent, he said.
The stock fell to 20 percent in October, he added. On the other hand, the share of SUVs in total passenger car sales has grown over the same period, Garg said. “So it is very clear to see that the SUVs are still the toast of the nation even after the GST cut. This is the real story. Actually, it is the mid-size SUV segment that has seen maximum growth,” he noted.
Garg stated that Indian customers are increasingly switching to compact SUVs instead of downgrading to small cars.
“The customer has the same amount as before, and now he can buy a bigger car for the same amount,” Garg said.
He noted that as a full-stack vehicle manufacturer, the company would continue to sell entry-level models and sedans as the segment, though curtailed, is still significant in the domestic passenger car industry (43 lakh).
Garg stated that SUVs now account for 71 percent of Hyundai Motor India’s total sales.
The contribution could reach 80 percent by 2030, he added.
Garg noted that the compact SUV segment, where Venue competes with brands like Maruti Brezza, Tata Nexon and Kia Sonet, continues to grow with customers switching from small cars.
“The segment had around 80,000 units from January to August and grew to around 94,000 units in September and October. The tax benefits for small SUVs are significant, with a tax cut of 13 percent and 11 percent on diesel and petrol versions,” he said.
He noted that the contribution of compact SUVs to the overall SUV segment currently stands at about 41 percent. The SUV segment currently accounts for 57 percent of total PV sales.
“The trend of customers upgrading to bigger and better models is clearly visible as more and more new buyers enter the compact SUV segment,” said Garg.
The all-new Venue is priced from Rs 7.89 lakh (ex-showroom) and comes in both petrol and diesel variants, paired with manual and automatic powertrains.
The company has sold 7 lakh units of the model so far.
Developed with an investment of Rs 1,500 crore, the next-gen Venue will be manufactured only at the company’s newly commissioned plant in Pune.
The plant will have an installed production capacity of 2.5 lakh units per annum by 2028.
Garg noted that in addition to serving the domestic market, the new location also aims to export to about 30 countries.
Responding to a question on the company’s future product strategy, Garg said Hyundai aims to be a multi-powertrain company with ICE, hybrid, CNG and electric models in its portfolio, catering to diverse customer requirements.
“From the global perspective of the company, India is very important… all these 29 years we have been an Indian company, but now even more so after the IPO… where cars are made by Indians, for Indians. And of course, now the company will also be led by an Indian. I think this is a very powerful statement,” he added.
As the company exited its long-standing second position in the domestic auto market, Garg said capacity constraints proved to be a major factor, while noting that the automaker is pursuing balanced growth.
“Numbers are very important, rankings are very important. The company aims to grow profitably, we want to have a balance between domestic and exports, balance between volume and profit,” he added.
Hyundai Motor India aims to have a market share of more than 15 percent in the domestic market by 2030, according to its growth plan.
When asked about the company’s EV strategy, Garg said the company is focused on improving public charging infrastructure with plans to have 600 DC chargers by 2032.
He noted that the company aims to fully develop the supply chain ecosystem as it already has localized battery packs.
“So we want to localize the entire supply chain, which we believe, together with the increase in volumes due to new models, will reduce the overall cost of electric vehicles,” Garg said.
Hyundai has announced plans to invest Rs 45,000 crore by FY30, with the aim of making India the second largest region in the world.
According to the roadmap, Hyundai Motor India plans 26 product launches by FY30, including seven new nameplates, marking its entry into the MPV and off-road SUV segment.
The company also aims to roll out a locally designed, developed and manufactured dedicated electric SUV for the Indian market by 2027.
The company will also launch the luxury segment brand Genesis in India by 2027.
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