It took much of this decade and the axing of its biggest brand – Santro – for Hyundai to shed its pure utilitarian tag, and some would argue it has still seen only moderate success in that goal. But with the roll out of sister brand Kia next year, Hyundai will definitely not make the same mistakes again.
Between both brands, Hyundai’s game plan would now be to capture the entire breadth of the market, with the luxury of offering current customers a fresh, premium choice as they move up the economic ladder. With a 12% share (CY 2017) of the Indian car market and an unchallenged number two spot behind Maruti Suzuki, Hyundai today has firmly placed itself as a value car brand for the mass consumer. That image has strong stuck to the brand, and is sometimes viewed as a baggage when the brand is trying to rope in premium and higher ticket car buyers.
Hyundai’s proposition today is of sharp, modern design, and a bevy of features at a highly aggressive price point. For the price conscious Indian buyer, this has struck the right chord. The i10 and i20 hatches are among the top 10 cars sold in India, with the entry model Eon recording decent numbers as well. There is word on the street that the Santro will also be back soon in a modern avatar. So the A and B segment battles are largely won. But the story is very different in the C and D segments. Even though there is good traction in the entry premium car space with the new Verna (post the Fluidic design launch in 2011) and the more recent Creta compact SUV, a bit more up the chain things sort of fizzle out. The C and D segment vehicles such as the Elantra, Sonata, Tucson, and the Santa Fe have been far less popular, with buyers opting for the German, or Japanese counterparts.
Step in Kia, with a top down approach similar to what we have seen with others such as Skoda and Ford, albeit with varying degrees of success. True to Hyundai’s value promise, the sharp designs and technology bits remain. In addition, expect more premium, luxury features at a very competitive price point. In February, at the biennial Delhi Auto Expo, Kia announced that the first launch will be a premium compact SUV based on the SP concept. While other vehicles such as the 7-seater SUV Sorento, small cars Picanto and Rio will follow, the brand has also promised to roll out a compact electric vehicle before 2021.
First impressions often go a long way, a lesson picked up early by other car brands such as Skoda. Skoda, accepted as a low-cost and mass car brand in Europe, was the first from the Volkswagen group to enter India with the premium sedan Octavia. This helped it establish a premium, even an entry luxury, image in the country. Kia could be looking at the same route.
For the Hyundai Automotive Group, which is known to have toyed with the idea of launching premium sub-brands such as Genesis, the launch of Kia comes after much deliberation across several years. The ingredients are already in place – a large supplier base, eager dealers and a ripe market with young customers.
The company is fairly serious about the market as well, setting up a separate new plant in Andhra Pradesh, fairly close to Hyundai’s base and the port in Tamil Nadu. It is now up to the product planners and marketers to create the big bang, and ensure a strong foundation as well as a complementary effect for the two brands in the Indian market. Between them, the main challenge now will be to avoid cannibalization, promote healthy competition and capture a larger slice of the pie from the giant that is Suzuki.