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Old 10th September 2004, 12:02   #1
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After leading the D segment battle for a while after its launch, customers have realised that there is nothing sporty about Indians first performance sedan.

The Elantra sold ONLY 131 cars in August. And dont blame all of this on production constraints.

Hyundai does well in segments where certain compromises can be made. But it just does not have the engineering excellence that is required in designing highly refined, plush and "tight" luxury cars.

I suggest just focussing on the sub-7 lac segment. How about a great CRDi MUV to boost volumes? Theres plenty that Hyundai can choose from and its become the master of selling volume goods with superb levels of product and service quality.

GTO

Source : Economic Times Article
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Old 10th September 2004, 12:03   #2
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For the record, the Corolla sold 741 cars, the Optra 615 and the Octavia 563 in August. Notice that the top two are petrols.

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Old 10th September 2004, 12:40   #3
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I'm a bit surprised at that. What do you think went wrong for the Elantra? It's got all the gadgets and safety features that can shame a D segment car, ride quality is excellent. The only downside is the handling, acceleration and steering feedback.

Regards...
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Old 10th September 2004, 12:54   #4
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Quote:
Originally Posted by [b
Quote[/b] ]What do you think went wrong for the Elantra? It's got all the gadgets and safety features that can shame a D segment car, ride quality is excellent. The only downside is the handling, acceleration and steering feedback.
well, i'm really not surprised at this. Sure it has a lot of gizmo's, but I think the main culprit for the low sales is the styling. It just looks too much like an elongated Accent. You would have thought that Hyundai would have realised that styling is very important in the higher segments. Look how well the Sonata sold...mainly because of its styling.

Why would someone buy a 10 lakh Hyundai Accent?

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Old 10th September 2004, 12:54   #5
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Maybe it doesnt look good, thats why. It doesnt have as much road presence as the Octavia/Corolla/Optra. The Elantra looks a bit smaller compared to the other cars in its segment. Even though its got all the safety features, it doesnt look strongly built. Looks very "hulka Phulka".
Its also has much lower (headroom). The only good thing abt the Elantra is the Crdi engine.
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Old 10th September 2004, 13:23   #6
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Quote:
Originally Posted by [b
Quote[/b] (Shan2nu @ Sep. 10 2004,11:10)]The only downside is the handling, acceleration and steering feedback.

Regards...
Shan2nu
U said it.
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Old 10th September 2004, 13:47   #7
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I agree with rtech and V12. Its mainly because of the looks . When an Elantra passes you really dont feel anything when say an Octavia or a Corolla for that matter. The car has absolutely no street presence at all. The body shell is very similar to that of the Accent. Customers initially might have bit the bait seeing Hyundais good reputation in the Indian auto industry but it seems to have died down. And yes the only good part is that awesome CRDi engine. And I guess those sales which GTO mentioned will be the diesel sibling.. The petrol version is a non mover.

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Old 10th September 2004, 15:34   #8
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For me, the Elantra flopped because of:

1. Looks (too Accent'ish). And very out-dated
2. Comfort - Really low rear seat
3. No prestige with the Hyundai brand
4. No flash. Not overtly luxurious interiors either.
5. Performance, handling etc. Not too many buyers would use it, but they like knowing that its there.
6. CRDi engine. Yes you read right. For me and you, the CRDi is the only good thing about this car. But for the luxury diesel customer sitting on the back seat, he does not like N-O-I-S-E, clatter and vibrations from the hood.

Buttttttttttttttttt for the most part, its because the competition has out-shone it. The Corolla, Octavia and Optra all rock. And that reverred Hyundai service? Well, all three competitors offer the same level too...if not better.

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Old 10th September 2004, 15:39   #9
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From 885 in May to 131 in August!!!!!!

Am slightly confused about the article though.

Quote:
Originally Posted by [b
Quote[/b] ]The Hyundai Elantra, which topped the D segment till May ‘04, slipped to the third place in August. Toyota Corolla’s 741-unit tally in August puts it on top of the segment, with earlier leader Elantra falling to 131 units.

GM’s Chevrolet Optra came in second with 615 units, while Skoda Octavia’s 563-unit tally places it fourth. A total of 2,050 units were sold in August in the D segment.
Elantra is third with 131 units and Octavia is fourth with 563 units *

Just a typo i guess.
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Old 10th September 2004, 16:04   #10
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Here comes the big question. How does one get their India strategy right?

Look at the whole scenario for a moment. Maruti's small cars sell well, but the bigger sedans like Baleno and SUVs like Vitara don't. Toyota's Qualis and Corolla sells well, but the Camry is slowly disappearing. Ford's Ikon and Endeavour are big hits, but nary a Mondeo.... i think the trend is visible here.

It really depends on what you launch initially. Look at Honda. Honda started out with the City in the Rs. 7.5-10 lakh range, then they went on with the Accord in the 15 lakh range, changed their city strategy into a 7.5-8.5 lakh range while the newer Accord comes at the same price alongwith the CR-V. Result? People in teh first place were willing to pay a 3-4 lakh premium over the city for the Accord and CR-V. But no one was ready to pay a near 12 lakh premium over the Qualis for a Camry.

Its all in the image. People perceive your brand on the basis of price points that you straddle at to some extent. Rather major extent. Hyundai started off on the wrong foot that way. It started with the Santro, then Accent and then Sonata and then Terracan. But after that 12-13 lakh barrier for the Sonata, people no longer wanted to pay a premium of 7 lakhs for the Terracan. Because at that price you are just a whisker away from the Mercedes brand. Then once Sonata's fuel efficiency problems surfaced, the re-sale values crashed. So with the launch of the Elantra, the initial sales were just a novelty factor, but as people soon realised that it looks no different from their relatively "not-so-rich" neighbour's accent, they ended up in a quandry and advised others against it.

The fact is, everyone today perceives Hyundai to be good enough for small cars and mid-sizers. But as it moves into the premium segment, no one is willing to buy it. Its a simple case of what you launch is first is what you should stick to. Fast movement into other segments only reduces brand value. Honda developed the City first. They got the product right, service right and brand perception to a point where they saw people who were ready to pay a premium for a Honda product. 3-4 years of wait really paid off for them.

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Old 10th September 2004, 16:19   #11
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Quote:
Originally Posted by [b
Quote[/b] (rtech @ Sep. 10 2004,11:24)]Why would someone buy a 10 lakh Hyundai Accent?
would prefer the sonata s20

Quote:
Originally Posted by [b
Quote[/b] ]2. Comfort - Really low rear seat
3. No prestige with the Hyundai brand
4. No flash. Not overtly luxurious interiors either

the sonata still holds the bar for all this three, atleast in hyd it does, sonata is a brand by itself ,people still swoon over the sonata only because of it's flashy nature
i bet even the most biggest hyundai hater would fall flat seeing a black sonata gold. but i wouldnt say the same for the new one though



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Old 10th September 2004, 16:26   #12
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Revv, I think more of it has to do with what the Indian market perceive as a luxury brand.

Hyundai, even if they did start off with the Sonata, would still not be able to sell the Elantra.

The Mondeo, well, that was just really expensive, and most people spending that money would rather get a Accord. The Toyota too was just too overpriced.

Remember, the previous generation Accord hardly sold as well, only because is styling was so dull.

The moral of the story is...the Indian public wants a modern, good looking car at a fair price. They are not going to be taken for a ride.

Rt
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Old 10th September 2004, 16:50   #13
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Hey Rtech

Your reasons are valid. Accepted. I just wanted to give a manufacturer viewpoint on how to approach the Indian market. Infact, as you say, the Accord didn't sell very well initially. True. But back then the market wasn't as huge as it is today. And if you really go to see, Accord sales picked up with time as the market grew.

Sure Indians need a good VFM car with good looks to boot. But if manufacturers want to really get it right, they first need to develop the segment they get into, get a strong foothold, see if resale values hold, see if people are willing to pay a premium for their brand and then go on a go up a segment. All of this takes time. But manufacturers are in a tearing hurry to launch models these days. Result? Losses in the line of cars for years and years, dead investments where returns just take longer. It doesn't make business sense at all that way.

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Old 10th September 2004, 19:49   #14
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Toyota has got the brand image which hyundai doesn't and people trust in Toyota's reliability. Thats why though Corolla is bit costly still tops the sales charts in its class. Frankly even i hate Hyundai cars verymuch.
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Old 10th September 2004, 21:24   #15
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What was so good about the Elantra.Nuthing besides the CRDi engine and the "masses" so called trust over Hyundai after the Santro and the Accent.Any sensible buyer would never buy a Elantra.Rather put his money on the Skoda or the Corolla,which are obviously more sensible to buy.They are too good for the Elantra.
One thing that went terribly wrong with the Hyundai is the styling.It looks like a Mix between Accent and the Sonata.
Ofcourse they created a lotta buzz in the market before its launch,with the CRDi engine in the offering right from day one.
The Elantra petrol is not selling as many units as the Crdi.
Reasons clear......."Average kya hai??//"

I`m sure if the SanStorm is launched with the Crdi engine it would do roaring business.

Cya.
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