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Close on the heels of grabbing the tag of the world’s third largest carmaker, Hyundai Motor Company (HMC) has achieved a significant milestone of producing over a million units annually in India, for the first time ever.
- Hyundai, Kia together make up near-23 percent of market share
- Over 50 percent Hyundai’s sales come from SUVs
- Capacity utilisation rates of over 90 was a key factor
Hyundai (along with sibling brand Kia) is only the second automaker after Maruti Suzuki to achieve the production milestone of a million units (10 lakh units) in a single year. Hyundai with 15.45 percent and Kia with 7.27 percent together currently account for a near-23 percent share of India’s passenger vehicle sales. The Korean siblings have been able to achieve record calendar year sales mainly because of accelerated production levels.
At present, India accounts for almost 15 percent of the brands' total global output. It also ranks amongst their top 3-4 production bases in the world, catering not only to the growing domestic market but also to key export markets of Africa, Middle East and Latin America.
Hyundai sees highest ever domestic sales
Hyundai’s best-ever annual production volume in India as yet, estimated to be between 1.02 to 1.04 million for combined Hyundai-Kia manufacturing operations, is up 20 percent over 2021's output. Our sister publication Autocar Professional has learnt that Hyundai Motor India will close 2022 with an output of about 7,00,000 units, while Kia India’s production tally is 3,40,000 units.
Tarun Garg, director (sales and marketing), Hyundai Motor India, said, “We will be selling our highest-ever domestic annual volumes in 2022, posting a growth of more than 9 percent over 2021. SUVs continue to drive the growth momentum for Hyundai and account for more than half of our total volumes.”
While Hyundai Motor India has been working hard to hold on to its number 2 position in the passenger vehicle market, with a hard-charging Tata Motors hot on its heels, Kia has posted over 40 percent growth in volumes in 2022. Even as the Sonet and Seltos SUVs maintain their strong position in their respective segments, the Carens MPV has delivered strong incremental numbers for Kia in 2022.
Myung-sik Sohn, CSO, Kia India, says that in 2022, due to improved customer sentiment and pent-up demand, the company posted very healthy sales figures and ramped up capacity to meet higher demand.
Riding the SUV wave
In line with global trends, the Indian passenger vehicle market, which is seeing strong double-digit growth of around 30 percent, is benefiting hugely from the sustained surging demand for UVs and SUVs.
Therefore, it is not surprising that, for Hyundai, which has clocked its best-ever annual sales of 5,52,511 units in 2022 (up 9.4 percent), over 50 percent of its sales belong to SUVs. The Creta, its best-selling product, sold 1,40,895 units and accounted for 25.50 percent of total sales last year.
Similarly, Kia has also reaped the benefits of an SUV-centric portfolio. Not only did it choose SUVs as the target segment but it ensured that the range of products it developed for India had a strong design DNA and came laden with features and technologies not seen in India at the time, at an extremely accessible price.
Kia’s successful market mantra was to offer a truly wide array of variants across engines, transmissions and features, and even brought some of the most highly advanced features from the premium and luxury market into mainstream SUVs.
Not surprisingly, Kia was the fastest to half-a-million sales in India. It drove past the 5,00,000 sales mark in July 2022, within three years of beginning operations.
Hyundai and Kia’s recipe of sweating assets aggressively with capacity utilisation rates of over 90 percent and using the base for exports to ensure significant economies of scale has paid dividends. Over time, the company has judiciously diverted capacity, either in the domestic market or exports to ensure high utilisation rates.
New models will be key to sustaining growth
While Kia has been outpacing the market growth due to incremental volumes coming from new models, Hyundai Motor India has seen its share decline. Garg clarifies that in the segments where Hyundai is present, it enjoys about 19 percent market share. However, the brand still doesn’t play in a fifth of the market and does not have a presence in the entry car, micro-SUV or the MPV segments.
Declining to share new product plans and the potential of bridging this gap, Garg says, “We will continue to move where the customer is moving. We continue to study the market, some of the gaps may get filled and some may not. But new models can help build the market share.”
The company will be banking on the new-generation Verna (BN7i) and the all-new micro-SUV (codenamed Ai3 CUV) to deliver incremental volumes. Meanwhile, Kia has mid-life updates coming up for the Seltos and Sonet SUVs soon.
Hyundai and Kia at Auto Expo 2023
Hyundai’s focus this year at the upcoming Auto Expo 2023 will be on autonomous driving tech and electric vehicles. Hyundai is expected to announce prices for the Ioniq 5 in India, which will also be its hero product at the event. The company will also be showcasing the Ioniq 6 electric sedan. And while Hyundai has not confirmed it, the brand may show another concept previewing its future sub-compact SUV, which will go on sale in the second half of 2023.
Meanwhile, Kia will be showcasing the EV9 flagship SUV as its hero product. The Sorento three-row SUV and the next-gen Carnival MPV will also be among other displays by Kia at the upcoming Expo.
Also See:
Every new car, SUV launching in January 2023
Toyota GR Corolla hatchback to be showcased at Auto Expo 2023
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