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Old 21st October 2007, 18:18   #1
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Post New big sedan in 2 years; 20% mkt share by next year: Hyundai

21 Oct, 2007, 1347 hrs IST, PTI

NEW DELHI: With plans to take Japanese auto giants Honda and Toyota head on in the premium sedan segment, Korean car maker Hyundai is developing a new big car for India, which is expected to hit the market in a couple of years.

full article here :

New big sedan in 2 years; 20% mkt share by next year: Hyundai- Automobiles-Auto-News By Industry-News-The Economic Times
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Old 21st October 2007, 18:21   #2
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Will the price of the new BIG sedan be 20% more than expected as well? Now that won't be a very big surprise. Hyundai, there is a lot more expected from you.
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Old 21st October 2007, 19:20   #3
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They cannot do anything right these days and seem to have lost direction completely after losing Subbu.

While most multinationals were busy getting local talent to run their businesses after initially trying out imported talent, the Koreans are busy trying to invent the reverse route of kicking out local talent.

No wonder they're in a mess.
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Old 22nd October 2007, 10:40   #4
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Totally agree. Their one cash cow is Santro, but as new models come in to the market, its sales will go down. Their recent decisions do not inspire confidence that they will price their new cars properly. In a price sensitive market like India, that is hardly going to help double their market share to 20%
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Old 22nd October 2007, 10:56   #5
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They still havent figured things out, have they? Another big sedan, man! The Sonata is a pretty decent machine but didnt sell nevertheless.

IMHO, here is what Hyundai need to do:

1. Realise that the only chart buster they have is the Santro. Introduce the Pa at a competitive price. Somehow, Hyundai just hasnt been able to do that of late (price correctly).

2. Factory-fit CNG + LPG sell. Just look at the sales of the Wagon R Duo. Hyundai, unfortunately, is selling the Santro with a dealer-fit and not a factory-fit. Offer factory-fit kits across the range.

3. Reposition the Verna to the 6 - 7 lakh segment ala Baleno. Including the diesel. The market has shown that it is unwilling to pay 8 - 9 lakhs for the Verna.

4. Reposition the Getz with competitive pricing. Especially the diesel which is currently and absurdly priced at almost 7 lakhs on the road.

5. A really good diesel MUV in the 6 - 8 lakh segment. I have said this before and I say it again. Hyundai has the values it takes to appeal to MUV buyers.
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Old 22nd October 2007, 10:58   #6
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Hyundai has completely lost it's standing in the premium market.
Now they have even messed up in the Getz Diesel segment.
Soon they would become a poor man's car brand in India, as Maruti Suzuki is moving strides ahead with right products and excellent packaging.
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Old 22nd October 2007, 11:08   #7
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Quote:
Originally Posted by jaganm View Post
Totally agree. Their one cash cow is Santro, but as new models come in to the market, its sales will go down. Their recent decisions do not inspire confidence that they will price their new cars properly. In a price sensitive market like India, that is hardly going to help double their market share to 20%
Double their market share to 20%. As of Apri-September 2007, Hyundai had a market share of 13.5% in domestic sales of four wheelers (passenger cars, MUVs, UVs). Their market share was 17.2% in cars, 0.1% in MUVs, and 0% in UVs. In cars, Hyundai's market share has declined from 20% in 2002-03. Why?. Because in compact Santro segment, they have declined from a high of 30% in 2002-03 to 20.2% in Apr-Sep 07. In midsize, Verna has not helped much with their share declining from a high of 21.1% in 2001-02 to 14.9% in Apr-Sep 07 (14.7% in 2006-07). Their market share in bigger cars is not worth the mention.

I beg to differ that the exit of Subbu has been the sole contributing factor. They have focussed on small cars and have not been able to fight it out in the bigger segment. In small cars, their Getz was a slow seller, and Santro is also now facing increased heat. They have to move out successfully out of small cars to get higher volumes and higher margins. While their gross sales have jumped from Rs. 2610 crores in 2001-02 to Rs. 7417 crores in 2005-06, their operating margins have tanked from 17.5% to 9.3%. of course, with economies of scale, they are making very high returns on capital. But clearly, even that may not be sustainable.
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Old 22nd October 2007, 11:17   #8
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No matter how Hyundai puts it out in their press releases (eg 5 lakh Getz being exported), remember that is a cumulative figure. The fact is that although Hyundai is still the largest car exporter from India, export growth has tanked from 95% in 2004-05 to 24% in 2005-06, 13.2% in 2006-07, and to 13.5% in Apr-Sep 07. Exports were so far saving them from declining share in domestic market. But exports are now growing at a lower rate not only because of rupee but more importantly because of a slowdown in European market. Getz exports are down this year (based on European sales figure for Jan-Jul 2007). Atoz/Santro is only marginally higher in exports.

Bottomline for Hyundai: more pressure to sell more in Indian market, till the European market picks up (not likely given that European market is now in long term stagnation). Also tap new African and Asian markets. For domestic buyers, Hyundai remains a good choice, but they are somewhat overpriced (Korean discount) and given their problems, good discounts can be negotiated.
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Old 22nd October 2007, 11:18   #9
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Recently when I visited the local Hyundai dealer, there were 6-7 Santros in the showroom. If there was a GetZ in that crowd, I didn't notice it.

The first thing the sales guy says "Are you looking for a small car?" I said no, he was openly crestfallen. Then he asked which car with a sad face, I said Tucson and his face registered no emotions.

I don't think this is a problem with a single salesman, there is some reason behind the lethargy to sell a big Hyundai car. Unless Hyundai can fix this, their big car success will remain a pipe dream. And their small car success will probably end with Santro.
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Old 22nd October 2007, 11:28   #10
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It may not be a question of lethargy, but resignation at the prospect of a long and futile slog to sell a big car. They may know from experience that say 40-50% of small car walk in prospects may buy their car (and get them commission), but say theoretically only 5% of big car walk ins may ultimately buy their cars.

Honestly, my experience with Hyundai dealers (Sunrise, Hyundai in East Delhi) has been good, and although I did not buy any, I felt sympathy for the salesperson, who was nice and chased me subsequently on the phone.
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Old 22nd October 2007, 12:05   #11
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Quote:
Originally Posted by Steeroid View Post
They cannot do anything right these days and seem to have lost direction completely after losing Subbu.

While most multinationals were busy getting local talent to run their businesses after initially trying out imported talent, the Koreans are busy trying to invent the reverse route of kicking out local talent.

No wonder they're in a mess.

What local talent does Honda have in India?
And for that matter, Tata has all the local talent! What are they doing with it?

I think, before glorifying management superheroes, one should realize that the real talent for any car maker is really their cars. That's it. (With the exception of Fiat, of course who just prove the rule by exception )

Technology and designs speak for themselves. You need exceptionally pathetic management like Fiat's to do really badly with all the wonderful cars and engines you have. But is the converse true? Can an exceptionally great manager sell bad cars? Not that Hyundai makes bad cars, but they don't make anything spectacular either...

Last edited by anandpadhye : 22nd October 2007 at 12:12.
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Old 22nd October 2007, 15:08   #12
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Quote:
I think, before glorifying management superheroes, one should realize that the real talent for any car maker is really their cars. That's it. (With the exception of Fiat, of course who just prove the rule by exception )
The Getz is actually a very competitive hatch, and far better than the Swift in many areas. Its the management that goofed up its market potential.
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Old 22nd October 2007, 15:25   #13
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Quote:
Originally Posted by GTO View Post
The Getz is actually a very competitive hatch, and far better than the Swift in many areas. Its the management that goofed up its market potential.
Do you really think so GTO?

I always thought the Swift had everything going against it (till the advent DDiS of course) but still was a smash hit due to it's looks that found a lot of acceptance in the market.

Getz on the other hand is just another "run of the mill" hatch (neither great looks nor a great engine).

I think you need something radically new or radically different in every new model (engine, interior, looks... something) these days and maruti seems to do it right!
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Old 22nd October 2007, 15:29   #14
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Quote:
Originally Posted by GTO View Post
A really good diesel MUV in the 6 - 8 lakh segment. I have said this before and I say it again. Hyundai has the values it takes to appeal to MUV buyers.
Absolutely Right !! Hyundai has Huge Potential in the MUV Market. Take out a vehicle which is priced a Lac cheaper than the Innova and they will hit the Jackpot I would say.

The GETZ which is a fantastic car and I consider it to be the best Hatchback in the Country today, has to be marketed well. People love its looks and everything about it BUT what Hyundai is missing is proper marketing and Absolutely Ridiculous pricing.

A few months back I used to argue with people who used to say that Hyundai is this and that !! BUT now I have started agreeing with them.

A few days back I was in Hyundai's Showroom booking a Getz 1.1 with my friend. I was strolling in their Car Park - they had almost 70 - 80 Santro's parked there, 5 Getz and about 10 Accents. Accents have apparently started selling thrice the number since they slashed the price by a further 40k ( ex 4.99 Lacs ), The salesman told me that Hyundai at one point had almost discontinued the Accent but sales in Haryana, UP and Delhi ( Northern India ) have picked up really well and is outselling Honda and MUL in certain cities ( I do not know if this is true ). It now has no plans of discontinuing Accent for a further 2 years.

They also need to do is cut the price of the Getz by 30 - 40k and they will notice the Sales change.

Also the PA should be sensibly priced ( a bit more than Santro ). And as GTO said factory fit LPG/CNG. It will sell.

As far as the Sonata Embera and Tucson go, I fail to understand why people do not buy these. I think they are fantastic cars and are priced just about right, but somehow people relate Hyundai to Mid Priced cars and not premium cars.

Just my thought !! I hope I do not attract any critisicm. Cheers !!
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Old 22nd October 2007, 15:40   #15
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Of course Getz is a good looking car with decent aggregates and overall a good package on its own (no Getz vs Switz comparison here). But it was priced higher than the market could bear. By the time they were ready with price cuts and new launches, Swift petrol and then Swift diesel had gained top of mind. From late 2004 to mid 2005, Getz had close to 8 months to establish a lead in the premium compact cars, but they blew it by trying to extract `new premium car' rent. Swift came in with lower prices and took away the entire market.

As someone said on some other thread, unlike Honda (and City pricing in particular which was higher than competition and still sells the most), Hyundai does not have the brand reputation as yet to get away with premium pricing.
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