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Old 7th August 2013, 10:43   #1
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Default Hyundai targets to overtake Maruti in "Compact Car" segments

Hello All,

Just went through a interesting article in today's Economic Times, on how Hyundai is building it's India strategy to overtake leadership position of Maruti Suzuki in compact car market in India, by the end of current decade.

Hyundai plans to:

1. Launch three compact cars in India over the next 1.5 years:
- Grand i10 with a 1.1 litre diesel engine to Swift,
- Eon 1 litre to take on Alto K10
- Next generation i20.

2. Hyundai plans to introduce one or two new models in India every year. They believe in the small car space a company should have products in every segment.

3. Hyundai has already planned 8-10 launches in the next three to four years. It will launch a sub-4 metre sedan sometime in2014, followed by a multi-purpose vehicle to take on Maruti's Ertiga and a compact SUV positioned between Ford EcoSport and Renault Duster in 2015-16. It's also exploring the potential to launch its flagship saloon Genesis in India.

Compact cars account for 52% of total passenger car market in India & Maruti commands almost half of this at 48% market share. But Hyundai is fast catching up by increasing it's compact car market share to 25% in first quarter of current fiscal year.

However auto experts believe it will be really difficult to takeover Maruti Suzuki in India for next 6 - 7 years.

Source: http://economictimes.indiatimes.com/...w/21666280.cms

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Old 7th August 2013, 14:49   #2
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

That is overambitious IMO. Though won't be bad for the industry if Hyundai targets it. Probably we will have more choices across all segments. But at this point, the reality is that the Eon+i10+i20+Santro, which is actually all of the Hyundai offering barely manages to touch the numbers of Alto alone.

The point is that Hyundai may be No. 2 in India, placed just after Maruti Suzuki, but what we need to remember is that there is a vast difference between the market share of both. Precisely put, Maruti Suzuki has 3 times more market share than Hyundai. Hence, it looks over ambitious to me for it to happen, at least in the next 6-7 years.
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Old 7th August 2013, 15:06   #3
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Originally Posted by saket77 View Post
That is overambitious IMO. Though won't be bad for the industry if Hyundai targets it. Probably we will have more choices across all segments. But at this point, the reality is that the Eon+i10+i20+Santro, which is actually all of the Hyundai offering barely manages to touch the numbers of Alto alone.

The point is that Hyundai may be No. 2 in India, placed just after Maruti Suzuki, but what we need to remember is that there is a vast difference between the market share of both. Precisely put, Maruti Suzuki has 3 times more market share than Hyundai. Hence, it looks over ambitious to me for it to happen, at least in the next 6-7 years.
You are discounting the possibility that a single blockbuster product can change this whole scenario. Look at what Duster did to Renault, or what Ecosport is doing to Ford. The Diesel i10 grand and then the mini SUV are 2 such products that have the potential. Lets see how it pans out.

One thing is for sure though, MS will have to be very active with facelifts/new launches to hold on to that lead.
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Old 7th August 2013, 15:30   #4
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Whether we like it or not, Hyundai seems to be the company nearest to be able to do it, especially with the 1.1 CRDe at their disposal, the gap is sure to reduce by a large margin.
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Old 7th August 2013, 15:54   #5
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

In order for them to close the gap,
1. They should bring the i10 Grand ASAP with diesel engine and price it closer to Swift. Currently MS is focusing more on Dzire production so as to not loose out to Amaze thereby decreasing Swifts output. The slanted H would need the straight H's help to put pressure at the other end.
2. Increase their Sales Centers by opening up more in Rural areas to match closer to MS Service Centers.
3. Focus more on reducing the prices of Spares and TCO.
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Old 7th August 2013, 15:57   #6
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Quote:
Originally Posted by 1100D View Post
Whether we like it or not, Hyundai seems to be the company nearest to be able to do it, especially with the 1.1 CRDe at their disposal, the gap is sure to reduce by a large margin.
I wish we see a healthy competition, but all the logic of better engines, technology, etc seem to take the backseat when Indians go shopping a car. Maruti Suzuki becomes default choice for many!
No other company has probably better enjoyed the early entry advantage than MS in India.

Hyundai surely needs more cars in its stable if it wants to take MS head on, because i10 & somewhat the Eon are the only bread & butter cars for them, but MS has managed to sell the Swift, Alto, Wagon-R & not to mention the new top seller, D'zire very well.
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Old 7th August 2013, 16:17   #7
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Hello All,

I feel the new i10 Grand with 1.1 CRDe engine can be a game changer for Hyundai. With increasing Petrol prices, Diesel cars will be in demand once again. Also in future if they can extend the i10 Grand to a sub-4 meter sedan (like Dzire & Amaze) consumers will surely have great options.

Also to make huge profits Hyundai needs to break glass in premium segments. The new fluidic Verna & other models are not doing as well as they were expected. Also a MUV / SUV to take on say Ertiga or Duster will be a welcome step.

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Old 7th August 2013, 16:31   #8
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

1) We have been bashing Maruti for selling successive generations of cars in parallel, now isn't that what Hyundai is doing ? The game changer could be the diesel motor, but if the internet grapevine is to be believed, Wagon R diesel is likely to come out this year. I strongly believe that Hyundai is making a negative move by not discontinuing the current i10.

2) The Micra active is also now a strong competitor at the price point but unfortunately Nissan looks like its not interested in the competitive but lucrative small car market in India. If Nissan manages to get cheaper diesel variant, even Maurti would have sleepless nights.

3) From the case of Eon, we can say that the actual expansion might not very high for Hyundai in terms of sales numbers. Hyundai, for some reason or the other, could not win over Alto, and this new Grand i10 which is likely to get slotted in between i10 and i20 will greatly increase overlap. The addition of diesel means some i20 buyers might go in for grand i10 diesel ( and the increased space in Grand i10 will help this ).

4) Somehow, the Grand i10 does not look really nice, but looks are subjective. However, what matters is the dynamic ability of the car to compete against Swift. I hope Hyundai has learned this by now.

5) By any chance ( and related effort ) if Brio diesel and/or new Jazz diesel crops up, both Hyundai and Maruti are in trouble for sure. But this will take quite some time IMO.

The good part is competition is increasing, but the negative point is that small car market is now duopoly or oligopoly at the best unlike the Rs. 8-15 lakh bracket where more than 2-3 competitors play around.
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Old 7th August 2013, 16:37   #9
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Though IMO this is overambitious, it is nice to see someone try. Atleast it will stir MS out of their over confident slumber. I love Suzuki but in the car market, they just aren't trying hard enough in our country especially with those half-arsed limited editions etc. Put all they've got into the next A-star, bring on the Swift Sport, Offer a sportier tuned version of the 1.2K series as an option, kill the zen estilo and other unnecessary products, work on bringing the SX4 replacement asap and expand their contract to include the 1.6 multijet to bring some beef to their SX4 replacement and upcoming compact SUV XA alpha (which they better be bringing soon) and the next time they go venturing into Kizashi/Grand Vitara updates, they better do a better job of marketing and have that 1.9 multijet ready cause while it hurts to admit it, Diesels are what this country wants.

In their race to become no. 1, I hope Hyundai doesn't forget to work the chassis and suspension of their cars :P
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Old 7th August 2013, 16:52   #10
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

The whole ET article, though supported with some figures, seems bogus & without any basis. The CEO of Hyundai is said to aiming for most loved/ admired brand in India, if not best selling.

Quote:
Excerpts:

C H Han, chief coordinator of Hyundai Motor India, confirmed to ET that the South Korean parent has asked for leadership position in India, "if not in numbers but definitely to be the most-loved brand".
He declined to share any target sales or market share numbers.
I do not know, what do these journos snort before dishing out automotive news , or it appears that journos who are under training for filmy gossips are deployed to cover automotive news.

A day or two before, there was an accident in Delhi, where a Mahindra CJ (modded one, I guess) driven by two Sikh guys in Rajouri Garden (Delhi) killed a policemen by hitting him, when he tried to stop them for checking. The front page of TOI referred the vehicle as a "Gypsy" & second as a "Jeep". I am sure people at Times India publications are paid incentives for "masala" news & this is what is happening here.

No company in India can dream of beating Maruti Suzuki at their game, because of the widespread A.S.S. that the company has set-up (riding Govt of India & its agencies). It is more than twice the size of its nearest competitor. And, if we take into account the company authorised service outlets, it is way bigger than what we or other competitors think of.

People do not buy Maruti Suzuki vehicles because those are best cars, but, because these are good cars that can be serviced anywhere, & that is their USP.

To cut short, I feel the news article is stupid article which has deviated from the original content & become an exercise to fill up page where the newspaper could not get advertisement (s) for or rambling of a Maruti basher on job.

Last edited by CARDEEP : 7th August 2013 at 16:53.
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Old 7th August 2013, 19:52   #11
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Highly unlikely!

Product Range is only one part of the equation. Others being:

1) They will need to scale up their 600+ dealer network above 1,000+ Maruti's dealers as well as match Maruti on the Authorized Service Center count.

2) Really work on the TCO to match Maruti. Maruti's higher resale value (Maruti True Value also plays a part here) along with cost of spares / service. I have owned a Maruti Esteem VXi MPFI 2001 and Hyundai Accent GLS 2006 till this year and both had done around 70,000 km and Accent spares have been far more expensive than Esteem's and I have just sold off the Accent and replaced it with a Fiat Linea. Though, Hyundai has worked on bringing cost of spares down for i10 / i20 but general customer experience is still the contrary thanks to its dealers. My neighbour who owns a 4 year old i10 Petrol which his wife drives and he has been given a repair estimate of Rs 35,000 for clutch overhaul + some other repairs. Their Car has done around 50,000 kms and has no accident history. Maruti's monitoring of its dealers is much higher than Hyundai. Over the years, I have received many more Service quality calls from Maruti than Hyundai asking me to rate the dealer service. So, there is still significant work Hyundai will need to do here. However, I must add that Maruti is only better in relative sense with Toyota being at the top of the table as far as customer service is concerned. There have been many complaints from Swift Diesel customers which shows that Maruti's Service has also come down couple of notches in recent years.

3) Maruti has focussed heavily on Rural marketing / sales which contributes to over 25% of its sales. Please check out the following link:

http://articles.economictimes.indiat...-mayank-pareek

4) I see many Maruti 800s / Altos in far flung geographies like Kashmir, North East and in unlikely terrains like Garhwal hills. I am discounting the Urban cities / centers here. Mahindras and Tatas usually are the bigger vehicles to be found there. Hardly any Hyundai's.

5) Top 3 - 4 models sold per month are usually Maruti's - Alto, Swift, Dzire, WagonR that routinely gross over 10,000 vehicles sold per month. Hyundai still does not have even a single model that grosses 10,000 vehicles regularly on monthly basis. Come to think about it, WagonR seems to be a very unlikely vehicle to be doing those kind of numbers. However, Maruti is so well entrenched in Indian consumer's mind that it will require much more than aspirational products and board room strategy to overtake Maruti.
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Old 9th August 2013, 14:00   #12
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

We, as Indians don't like recurring expenses on products in form of maintenance and upkeep. The low cost of ownership of Maruti is miles ahead of the higher upkeep costs of Hyundai.

I don't know why Hyundai is lacking in this area, even after about 15 years of its existence in India. By now, most of the production would have been localised including the spares, which should have brought the costs down. This is an area where Hyundai is missing the mark, apart from the deep reach as MS.
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Old 9th August 2013, 17:58   #13
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Hyundai may have efficient (if not efficient petrols atleast efficient diesels) and reliable cars, but if it hopes to overtake Maruti Suzuki in the compact car market, it needs something else. Off-the-shelf spares availability and service centers that do not try to loot their customers. I would never buy a B-segment hyundai that costs as much to maintain as a D-segment Toyota.
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Old 10th August 2013, 01:22   #14
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Quote:
Originally Posted by saket77 View Post
We, as Indians don't like recurring expenses on products in form of maintenance and upkeep. The low cost of ownership of Maruti is miles ahead of the higher upkeep costs of Hyundai.

I don't know why Hyundai is lacking in this area, even after about 15 years of its existence in India. By now, most of the production would have been localised including the spares, which should have brought the costs down. This is an area where Hyundai is missing the mark, apart from the deep reach as MS.
Completely agree.Hyundai must work on reducing the maitenance cost before take over Maruthi - infact this should be tgheir top priority at this point.

People who buy premium to mid range cars may bother much about the maitenance cost and most likely it will be afforable for them . But when this happens to a person who just managed to buy an entry level car, the negative publicity which the company gets will be more widespread and fierce.
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Old 10th August 2013, 06:14   #15
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Default re: Hyundai targets to overtake Maruti in "Compact Car" segments

Finally Hyundai decides to Wake up. I always felt that Hyundai had great potential in India because they have huge service network and until sometime back they were similar to Maruti because they could only sell Santro, i10 but all their premium offerings were not doing great. But they have made great progress now with fluidic designs such as i20 and Verna selling very well.

Still hyundai kept low profile. They were silent when we saw XUV, Ertiga, duster, amaze and the ecosport. Each of these vehicles opened a new segment and are doing well in their respective categories(except say for XUV off late)

Glad to see them finally deciding to win market share. Competition is always healthy. I am excited about Honda's plans till 2015 and Maruti being leader will not be silent. And finally Hyundai decides to announce It has its own ambitions.
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