Hyundai Motor expects sales in India to reach 300,000 units in 2008, the head of its Indian operations said on Friday, indicating a market share target of 25%.
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Hyundai’s 2008 sales forecast compares to projected total car demand of 1.2m units, Reuters reported.
So far this year, Hyundai has sold 107,482 cars in India for a share of 18%, trailing only Suzuki maker Maruti Udyog, which commands just under half of the market. For 2006, Hyundai has targeted a share of 20%.
“We want to be number one in India,” Lheem Heung-soo, managing director and chief executive officer of wholly-owned Hyundai Motor India, told Reuters at the company’s headquarters outside Chennai [once Madras], in southern India. “Our share will increase despite more competition,” he said.
After starting to build cars in India just eight years ago, Hyundai has expanded at high speed in the ballooning market, investing $650m in a 300,000-units-a-year plant. It is now constructing another $500 m factory at the same site in the southern state of Tamil Nadu which will eventually have the same output capacity, working at a full three shifts, six days a week, Reuters noted.
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By GlobalDataThat plant, to start operations in October 2007, will build a new, follow-up model to the Santro small car, Hyundai’s flagship product in India, and also widely exported.
“My promise to our dealers was to launch two new models every year, including facelifts,” Lheem told the news agency.
Hyundai now sells seven models in India, including the imported Tucson crossover and the Terracan sport utility. It will roll out the Verna medium-sized sedan next month, and a diesel version of the high-end Sonata sedan in October.
To ride the growing popularity of a diesel powertrain, Lheem told Reuters Hyundai would aim to roll out a diesel Getz “as soon as possible”, while the new Verna would be available in both petrol and diesel at its launch.
Hyundai will also offer compressed natural gas (CNG) and liquefied petroleum gas (LPG) versions of the Santro model next January, Lheem added.
Reuters noted that Hyundai’s broad product range is a major plus in a market that is still dominated by small cars like the Maruti Alto and the Santro, but is also moving into the mid-sized segments.
Lheem acknowledged, however, that competition was becoming stiffer as more car makers enter the market.
Currently, Reuters said, only Maruti, Hyundai and Tata Motors are present in the most popular entry level, but General Motors is scheduled to launch its Chevy Spark car in 2008 while Toyota, Honda and Nissan Motor also intend to compete in that segment.
“Everybody is expanding their capacity — there are no exceptions,” Lheem told the news agency. “Competition is severe.”
Lheem told Reuters Hyundai would continue to seek cost reductions through more localisation of parts to ensure its product prices stayed competitive against its rivals.
Hyundai is also aiming to achieve greater economies of scale by expanding exports from India. It now accounts for 60% of all cars exported from India, and expects to ship 101,000 Santros and Accents this year, the report said.
When the second plant is fully operational, moving to three shifts and six-day weeks by 2008, Lheem told Reuters, he wanted exports to account for half of total output, reaching 300,000 units a year.
Hyundai aims to raise the number of export destinations to 66 countries from 55 now, with expansion into more markets in South America, Asia-Oceania and the Middle East, he said.
To support an expansion in domestic sales, Lheem said Hyundai would bring the number of dealerships to 200 this year, from 157 now, and to a further 300 outlets in 2008.
According to Reuters, Hyundai will also make additional investments in a full research and development centre, to be located in either Hyderabad or Chennai, and with a planned headcount of 800.
