INDIA: Hyundai targets Suzuki with Eon

By Satnam Singh | 13 October 2011

Eon is intended to give Maruti Suzuki an entry-level headache

Eon is intended to give Maruti Suzuki an entry-level headache

Hyundai Motor India is hoping the launch of its own new small 800cc Eon model will give it the edge over rival Maruti Suzuki, currently dealing with labour problems.

Society of Indian Automobile Manufacturers data shows Hyundai running about 30,000 units behind its rival calendar year to date.

Hyundai spent about US$185m on new car which is the lowest investment on any car model in its range.

The car is priced from INR280,000 (US$5,700) in six variants with the top version INR372,000 ($7,570).

The low compact segment – in which Maruti's Alto is key competitor - is about 700,000 to 800,000 units annually.

“We are targeting sales of between 140,000 to 150,000 units annually or about 12,000 units a month,” said Hyundai sales and marketing chief Arvind Saxena at a launch event in New Delhi.

The model is India-specific to start but Hyundai has not ruled out exports later.

“The model will focus on the India market initially and later on we may look for opportunity in South America, South Africa and Asia Pacific,” Saxena said.

Hyundai’s Chennai unit is running at full capacity; asked about plans for setting up another plant, Saxena avoided a direct reply but said: “We have enough capacity for the next couple of years.”

The company may take the decision if Eon volume picks up in coming years.

The model is manufactured at the Chennai plant. Hyundai has capacity for about 600,000 units annually in its two plants at Chennai.

Hyundai sold about 380,000 units in 2010-11 in the domestic market and has 19.6% market share.

It also exported about 240,000 units last years. Last year's  total tally was therefore about 620,000 units and, with the new small compact, sales could reach around 800,000 units from next year onwards.