Hyundai to Stay in Small Car Segment in India

Mumbai, Oct 15 (PTI) Small cars will continue to have relevance in the Indian market, considering the number of two- and three-wheeler users aspiring to upgrade, and Hyundai will not abandon the entry segment, Hyundai Motor Co President & CEO Jose Munoz said on Wednesday.

While the company will continue to develop the fast-growing SUV segment in India, it will also use the entry segment to tap customers who will look to upgrade in future.

In an interaction with reporters here, Munoz said, given the population and the expected motorisation in India, there are projections that this market will become "more than 5.6 million" units annually.

"If you look at the number of people who are driving motorcycles or three wheelers, you will see that all these people, sooner or later, their aspiration is going to have a passenger car. So I never see India as one market like many other markets, but as two Indias."

Elaborating further, Munoz said on one side is the Indian market, which is becoming like all global markets that would like to have more SUVs and more off-road vehicles.

"And on the other side, you have all these markets, which are a massive market, where the current users of three-wheelers and motorcycles will move into passenger cars," he noted.

Munoz was responding to a query on how the company saw the role of small cars, which have seen a decline in sales in the past few years in India, as SUVs gained momentum.

He further said, "So we cannot say only one. We need to be involved. Hyundai has been a very, very popular brand."

Asserting that Hyundai's older small cars, which are "humble vehicles", are reliable and solid, offering very low cost of ownership and is "customers resonate with those products".

"So we will develop the SUV market because it's growing, and it is something that we do very well. We've done in other countries very successfully but we are not going to abandon the entry market, which makes it more competitive and allows us to continue to be very popular," Munoz said.

He said it is much easier to upgrade a "consumer who has been driving a very reliable entry Hyundai" to a bigger SUV with higher content and better features.

"It is low risk," Munoz said, adding that the customer already knows the brand and its after-sales service.