NEW
DELHI: The Indian unit of Hyundai
Motor is getting aggressive with product plans as it aims to tap the increasing
popularity of utility vehicles.
The
nation's second largest car maker plans to launch a compact sport-utility
vehicle and an 'SUV
look alike' crossover in 2015, trying to repeat its success in India in the
past 17 years with compact hatchbacks and sedans. Hyundai is investing as much
as Rs 1,500 crore on developing the two products.
Hyundai will launch the
compact SUV,
code-named GS, in the second half of 2015, said a source with knowledge of the
company's plans. The vehicle is developed at a cost of Rs 1,000 crore and is
based on the ix25 SUV platform. The SUV, which will be pitted against the Ford
EcoSport and Renault Duster, will be built 90% with local content, which should
help keep cost low.
It has
also decided to develop a crossover, either on the Verna or Elite i20 platform,
with an investment of Rs 500 crore for India, the source said. That vehicle is
also slated for launch in the second half of 2015. It will be followed by a
multi-purpose vehicle in 2016, which will likely compete with the Maruti
Ertiga, Toyota Innova and Honda Mobilio.
Rakesh
Srivastava, senior vice-president of sales and marketing at Hyundai India didn't
provide details on the launch plans. "Hyundai is very strong in
compact and sedan segment and has huge acceptance of its products. We will
further extend it by our product line up by bringing in series of product in
the SUV
and MPV segment while continue improve on the compact and sedan category,"
he said.
Hyundai is already present in
the premium SUV segment in
India with the Santa Fe, which has not done so well, selling only around 175
units a month. Analysts say if priced well, the product can succeed.
"Looking at the customers' preference over last two years, demand for both
SUVs and MPV will increase in coming years. If OEM prices the product competitively,
they will be able to increase their market share in this segment," said
Abul Majeed, partner at PricewaterhouseCoopers.
"As
in this segment there are already existing players so the success will depend
on the pricing and design of the product," said Subrata Ray, senior group
vice-president at ratings firm ICRA.
Hyundai's Srivastava said the
company is known to offer world-class design and high-end features, "with
an aggressive pricing by way of high level of localization".
The
Korean company is planning to increase its product capacity from current 6.80
lakh to lakh units by re-engineering production processes. In fact, it has
already got an additional capacity of 50,000 units for local sales after some
of the exports models were shifted out of India.
"We
expect to gain volume with double-digit growth next year and increase market
share by one percentage point at the already-high base in the passenger vehicle
segment," Srivastava said.
Its
share of the local car market is expected to be 22% in 2014, compared with
20.1% last year. In the passenger vehicle space, which includes UVs, its share
is expected to grow to 16.4% from 15.4%.
The
utility vehicle segment has seen growth of 5.24% between April and November
2014 with sales of 3.63 lakh units. Car sales have expanded at a slower pace of
3.8%.
Looking
at the brighter prospects in the UV segment, other manufacturers are also
lining up their product in this category. Italian carmaker Fiat recently
launchedAvventura in the crossover segment while Volkswagen is planning an SUV for India. Toyota has
launched the Etios crossover a few months ago.
Maruti
Suzuki is lining up a crossover and SUV. Mahindra & Mahindra
has plans to launch as many as seven utility vehicles in 2015. Renault also
announced that it would launch seven-seater multi-purpose vehicle Lodgy in
India in early 2015.
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