Economic Times: November, 2016
New Delhi: At a time when debate is raging across the country over the gov ernment's move to demonetise high value currency, which some experts say can hit consumer demand adversely, Korean auto major Hyundai Motor India Limited (HMIL) has come out with a slew of initiatives to facilitate cashless transactions across its showrooms and service centres.
In a freewheeling conversation, Hyundai India's Managing Director Young Key Koo tells Sharmistha Mukherjee how long-term the merging of the parallel economy will increase credit availability by banks and aid the growth of the industry. Edited excerpts:
After you built on the success of the Santro, Hyundai launched two premium vehicles this year. Has the market evolved that much?
We launched two premium models in 2016 -first one is the Elantra and now the Tucson. Last year, we launched Creta, which is a volume model, to generate demand in the SUV segment.
So we have volume models and models aunched to lead our image as a modern and premium brand...I think the low segment -the Eon, the Nano, the 800 has not grown. The only segments which have grown are the SUV segment (37 per cent) and the compact segment (15 per cent).
We will have Eon as an entry model for passenger cars but will bring in QXI as a volume model in the entry SUV space. The Tucson comes in between Creta and Santa Fe to complete our SUV portfolio.
How important is the Indian market for Hyundai, especially since sales have been under pressure in China?
I think India is very important and a key market to Hyundai Motor Company's global strategy. India contributes 13 per centto global volumes.
At Hyundai Motor India we are aiming at 0.5 million in domestic sales and we are exporting almost 25 per centof our production.
HMIL is very important to HMC, not only for country volumes but also as a hub of small products for exports to 92 countries.
The demonetisation drive has squeezed liquidity out from the market. Do you fear it will impact sales?
The demonetisation drive is good for the country. As much as 65 per cent of car sales are financed. We do not see any impact in the medium term. This measure will actually grow the market because everything will become accounted.
With the parallel economy merging, credit will become more available from banks. This will bring in growth to the industry in the long-term.
Delhi is reeling under severe air pollution.As a carmaker, what measures are you considering to contribute to a cleaner environment?
Recent studies have shown that the pollution in Delhi is largely caused by activities outside of Delhi related to crop burning etc. The auto industry is not the cause of concern for pollution; that has been established.
But as a responsible manufacturer, we will be bringing in new-age technology for clean air, in which the leading one would be hybrid technology.
Hyundai has announced plans to have 28 zero emission vehicles by 2020. Given the cost of pure hybrid technology, would it be feasible to have products across multiple segments in India?
In case of hybrid and electric vehicles, there are many eco-friendly products. We want to bring the hybrid first and then read the market situation. In case of electric vehicles, they need some kind of facility to recharge.
I think strong hybrid is expensive. We will bring in mild hybrid in the mid segment and also in the SUV segment in 2019 on existing models.
We will also showcase a 1600 cc strong hybrid vehicle in the auto expo in 2018. For environmentfriendly vehicles, we need more support from the government in terms of incentives for customers to adopt the technology.
The industry is abuzz with talks of Kia and Daihatsu entering the Indian market.What kind of synergies do you see with Kia and what do you make of increased competition with Toyota?
Kia is a competing brand for us. I see no synergies; they are a different entity with a different strategy, a different management and different operations. (As relates to Daihatsu) The compact segment has always been very competitive and Hyundai has always excelled.
Many regard cab aggregating platforms as a threat to the automobile industry. Your thoughts...
In the long-term these kind of ride-sharing platforms have potential in the Indian market. They are our clients. They even bought some models from HMIL. The important thing is how to make good business with these ride-sharing companies by collaborating with them.