Competition is set to heat up in the domestic small car segment, with a number of players entering the fray, but Hyundai Motor India Ltd. (HMIL) asserts that it is prepared to defend and move up its position in the market place.
It has already initiated a combination of actions to secure its hold on the Indian marketplace. Currently, it has a 20 per cent share in the domestic market. Addressing his maiden press conference since his elevation as the Managing Director and Chief Executive Officer of HMIL here on Tuesday, H.W. Park said the R&D (research and development) centre of its parent in Korea was working on developing a small car for India. The still-to-be-developed small car would be smaller than its top selling Santro, and probably cheaper as well.
Significantly, the small car development and production could entail an investment of a minimum Rs.800 crore, according to Arvind Saxena, Senior Vice-President (Marketing & Sales). Hyundai declined to divulge further details about the car, which is in the design stage. "Initially, it will be targeted at India. Gradually, however, it will also be exported," Saxena said.
Mr. Park asserted that HMIL would continue to focus on the domestic market. India, he said, remained a key market for Hyundai. Mr. Park said the year 2009 has been a landmark year for HIML with record monthly sales. He said HMIL would boost its dealer network by expanding the footprint to 320 from the current 274. ``We are looking ahead to provide a new bench-mark in customer service,'' he said. Mr. Saxena said HMIL would focus on new products, improved network and product promotion to secure its share in the marketplace. He admitted that the Government-initiated stimulus packages did help to drive demand. He, however, felt that “fundamentally the demand is also getting stronger.”
Mr. Park said HMIL would churn out 5.6 lakh cars from its two units this year. The two plants have a combined production capacity of six lakh units. He was confident that the capacity use at these plants next year would also be similar to the current year's utilization. Mr. Saxena expects the industry to post a 14-15 per cent growth this year.