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Hyundai readying another small car

Hyundai Motor India, the second-largest car manufacturer in the country, is working on yet another small car for the Indian market.

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Hyundai Motor India, the second-largest car manufacturer in the country, is working on yet another small car for the Indian market.

According to sources, the company is working on a hatchback, to be positioned between the i10 and the i20.

It would boast of Hyundai’s new 1.1 litre diesel engine, which would be manufactured at its upcoming engine plant in Chennai. 

Testing of the new car, codenamed BA, is expected to begin in 2-3 months, while production is expected in October.

The car is expected to create a new segment in the mass market small car segment, which currently contributes 70% of the overall volumes of the Indian passenger vehicle industry. Hyundai also has the Santro and Eon in this space.

The company refused to confirm the development.
“As part of corporate policy, we do not comment on speculations on future products,” said Rakesh Srivastava (vice-president – sales & marketing).

The company, however, is looking at tapping different segments in order to maintain its market share and compete with new players. Its market share in the passenger car market increased to 19.5% in 2012 compared with 19.3% in 2011. 

“Hyundai Motor Co (HMC) group sees immense potential in the Indian market. We did not have SUVs and MPVs and are preparing now. We have immense potential to improve our market share,” Bo Shin Seo, managing director/ CEO, Hyundai Motor India, said last week.
“HMC has a strong capability to develop new products, but we have not decided the schedule of launch,” he said.

Asked if he sees a potential for a compact diesel vehicle, he said, “In the small car space, the mileage between petrol and diesel cars is not too different, and diesel car is more expensive, so it will be a challenge.”

Hyundai logged a single-digit growth last calendar, with domestic sales up 4.7%.
The company is looking to grow at a similar pace this calendar as well.

It is investing $300 million in a flexible engine plant in Chennai, which will offer customers more diesel options across segments.  

According to experts, the company’s new small car might open up a new segment and further expand the small car market, which is currently flat due to increasing fuel prices. It could well be a threat for the market leader – Maruti Suzuki.

“A new model in the small car market will definitely challenge the market leader. However, the success of the product will depend on the pricing and the quality of product,” said an analyst with domestic brokerage.

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