Hyundai Motor India plans to launch a new model every year for the next few years as it seeks to hold its own in a fiercely competitive car market in the country. Besides, it will give a facelift to an existing model every year and also make minor modifications for a model year change.
(Auto makers refresh their line-up with small changes for the new calendar year, which they refer to as model year change.)
Over a buffet dinner at an Indian restaurant in Seoul's shopping district of Itaewon, Mr Han-Woo Park, Managing Director & CEO, Hyundai Motor India Ltd, told a group of visiting Indian journalists last week that this will be the company's strategy to meet competition, from the likes of Ford Figo, Chevrolet Beat, Volkswagen Polo and the new WagonR from Maruti Suzuki, besides the spate of new launches planned.
“I will launch minimum three models a year,” he told the journalists, on a visit sponsored by Hyundai Motor India to some of its parent company's facilities in South Korea.
“I feel that competition will be tough this year,” he said, and added that even in the face of the new launches by competitors so far this year, Hyundai Motor India's market share did not drop. This, he attributed to strong marketing and sales and the product line-up. Last year, the company's average market share was 20.6 per cent. In the January-April 2010 period, this increased to 20.7 per cent.
Hyundai Motor India sells the i10, Santro, i20 (all compact cars), Accent and Verna (sedans), and Sonata, a luxury sedan. It plans to launch the Santa Fe sports utility vehicle later this year.
The recently launched Ford Figo compact car has been reporting good sales numbers, especially the diesel option, which accounts for nearly 70 per cent of the car's sales.
Will he look at a diesel engine option for the i10? Mr Park replied that the company had not thought of this option till now, but might consider it for the new i10, whenever it was launched.
Hyundai Motor India gets 1.1-litre diesel engines from Hyundai Motor Company for the export model i10.
Mr Park was confident of the automobile industry's prospects for this year, with sales expected to grow 10-12 per cent over last year. Hyundai Motor India expected to do slightly better than the industry average.
The company, according to him, will have a stronger rural focus in the coming years. Rural sales accounted for more than a fourth of the company's total sales. From January to April this year, the rural market had grown 27 per cent, with Hyundai's sales growing at about 40 per cent. The company's strategy was to have sales branches in the rural areas to push sales.
When would the company think of expanding capacity? “We will think of it when the domestic sales account for 70-80 per cent of total sales,” said Mr Park. Last year, the domestic and export sales were equally split, with domestic sales growing to 57 per cent this year.
Mr Park was firm in stating that the company would not yield any more ground to a section of the workers which is threatening an agitation.
Last year, he said, the company took back 20 of the dismissed 87 employees. But some of them had agitated against the management, even when they were still serving their probation period. There was demand to take back some more of the dismissed workers.
Mr Park said “we will take a firm stand this time. We will not reinstate even one person.” On humanitarian grounds, the company was trying for an out-of-court settlement. “We have reached a settlement with four persons and are negotiating with a few more,” he said.
The industrial relations scenario was a major issue for the company, he said, and added that it would not be possible to run a large organisation if the company had to repeatedly compromise its stand. Moreover, it would affect the other industrial units in Sriperumbudur area, where Hyundai Motor India's plant is located.
“I don't think reinstatement is the only option for a settlement on humanitarian grounds. An out-of-court settlement is also an option,” said Mr Park.
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