
Hyundai Motor India Limited (HMIL), a wholly-owned subsidiary of the South Korean automotive giant Hyundai Motor Company (HMC), has been a significant player in the Indian automobile industry since its inception. This case study delves into the journey of Hyundai in India, tracing its path from its entry into the Indian market to its current status as one of the leading car manufacturers in the country. The study also examines the strategies that have propelled Hyundai’s growth, the challenges it has faced, and the innovations that have made it a household name in India.
1. Hyundai’s Entry into the Indian Market
Hyundai entered the Indian market in 1996, a time when the Indian automobile industry was still in its nascent stages. The market was dominated by Maruti Suzuki, which had a near-monopoly with a market share of over 80%. Other players like Tata Motors, Hindustan Motors, and Premier Automobiles had a marginal presence. The entry of Hyundai was a bold move, given the competitive landscape and the challenges of operating in a developing economy.
Hyundai established its manufacturing plant in Sriperumbudur, Tamil Nadu, with an initial investment of $614 million. This plant was set up as an integrated facility, with a focus on manufacturing, assembly, and testing. The choice of Tamil Nadu was strategic, considering the state’s infrastructure, availability of skilled labor, and proximity to ports for export.
2. The Launch of Hyundai Santro: A Game Changer
Hyundai’s first offering in the Indian market was the Santro, launched in 1998. The Santro was a compact car designed specifically for the Indian market, keeping in mind the needs and preferences of Indian consumers. The car was priced competitively and offered features that were previously unheard of in the segment, such as a tall-boy design, power steering, and a spacious interior.
The success of the Santro can be attributed to Hyundai’s aggressive marketing strategy. The company roped in Bollywood superstar Shah Rukh Khan as its brand ambassador, which helped in building a strong brand image. The Santro quickly gained popularity and became one of the best-selling cars in India. By the end of 1999, Hyundai had captured a significant share of the Indian market, challenging the dominance of Maruti Suzuki.
3. Expansion of Product Portfolio
Buoyed by the success of the Santro, Hyundai expanded its product portfolio in India. The company launched several models across different segments, including the Accent, Sonata, Getz, i10, i20, and Verna. Each of these models was well-received, helping Hyundai establish a strong presence across various segments.
The introduction of the i10 in 2007 was another milestone for Hyundai in India. The i10 was developed at Hyundai’s research and development center in Hyderabad and was tailored to meet the specific needs of Indian consumers. The car was compact, fuel-efficient, and came with a host of features, making it an instant hit.
In 2011, Hyundai launched the Eon, a small car aimed at the entry-level segment. The Eon was positioned as a competitor to Maruti Suzuki’s Alto, which was the best-selling car in India at the time. Although the Eon did not achieve the same level of success as the Santro, it helped Hyundai strengthen its position in the budget segment.
4. Technological Innovation and R&D Focus
One of the key factors behind Hyundai’s success in India has been its focus on technological innovation and research and development (R&D). Hyundai has invested heavily in its R&D center in Hyderabad, which is one of the largest R&D facilities outside South Korea. This center has played a crucial role in developing products specifically for the Indian market.
Hyundai has also been at the forefront of introducing new technologies in its vehicles. The company was one of the first to introduce features like anti-lock braking system (ABS), airbags, and automatic transmission in its cars in India. Hyundai’s commitment to quality and safety has helped it build a strong reputation among Indian consumers.
5. Marketing and Branding Strategies
Hyundai’s marketing and branding strategies have played a pivotal role in its success in India. The company has consistently invested in brand-building activities, focusing on creating a strong emotional connect with Indian consumers. The association with Shah Rukh Khan has been one of the longest-running brand endorsements in India and has significantly contributed to Hyundai’s brand image.
Hyundai has also been proactive in adopting digital marketing strategies. The company has leveraged social media platforms to engage with customers and create buzz around its products. Hyundai’s campaigns, such as ‘Live Brilliant’ and ‘Drive Safe India,’ have resonated well with the target audience.
6. Dealer Network and After-Sales Service
Hyundai’s extensive dealer network and strong after-sales service have been critical to its success in India. The company has over 500 dealerships across the country, ensuring that its products are easily accessible to customers in both urban and rural areas. Hyundai has also focused on providing a seamless after-sales experience, with a network of authorized service centers offering quality service and genuine spare parts.
The company’s ‘Hyundai Advantage’ program, which includes extended warranties, roadside assistance, and periodic maintenance services, has further strengthened its after-sales service. This focus on customer satisfaction has helped Hyundai build a loyal customer base in India.
7. Challenges and Competition
Despite its success, Hyundai has faced several challenges in the Indian market. The competition in the automobile industry has intensified over the years, with the entry of global players like Honda, Toyota, Ford, and Volkswagen. These companies have introduced a range of products, offering stiff competition to Hyundai in various segments.
Another challenge for Hyundai has been the changing regulatory environment in India. The introduction of stringent emission norms, such as Bharat Stage VI (BS6), and the push for electric vehicles (EVs) have forced automakers to adapt their strategies. Hyundai has responded by launching BS6-compliant vehicles and introducing its first electric vehicle, the Kona Electric, in 2019.
8. Hyundai’s Response to the COVID-19 Pandemic
The COVID-19 pandemic posed unprecedented challenges for the automotive industry, including Hyundai. The nationwide lockdown in India led to a complete halt in production and sales in the first half of 2020. However, Hyundai quickly adapted to the new normal by focusing on digital sales and contactless service initiatives.
The company introduced ‘Click to Buy,’ an end-to-end online sales platform that allowed customers to purchase cars from the comfort of their homes. Hyundai also enhanced its hygiene and safety protocols at dealerships and service centers to reassure customers during the pandemic.
9. Hyundai’s Future Plans in India
Looking ahead, Hyundai has ambitious plans for the Indian market. The company aims to strengthen its position by expanding its product portfolio, particularly in the SUV and EV segments. Hyundai has already launched popular models like the Creta and Venue in the SUV segment, and the success of these models has reaffirmed its leadership in this category.
In the electric vehicle space, Hyundai plans to launch more affordable EVs in India to cater to the growing demand for sustainable mobility solutions. The company is also exploring opportunities in connected car technology and autonomous driving, with plans to introduce advanced features in its future models.
Hyundai is also committed to contributing to the Indian government’s ‘Make in India’ initiative. The company’s manufacturing plant in Sriperumbudur is being upgraded to enhance production capacity and efficiency. Hyundai aims to make India a global manufacturing hub for its small cars and export these vehicles to markets around the world.
Conclusion
Hyundai Motor India has come a long way since its entry into the Indian market in 1996. From being a new entrant in a highly competitive market to becoming one of the top car manufacturers in the country, Hyundai’s journey has been marked by innovation, customer-centric strategies, and a relentless focus on quality. The company’s ability to adapt to changing market dynamics and its commitment to delivering value to customers have been key drivers of its success.
As Hyundai continues to evolve, it remains well-positioned to lead the future of mobility in India. With a strong product portfolio, a focus on technology and innovation, and a commitment to sustainability, Hyundai is poised to drive growth and create new benchmarks in the Indian automotive industry.