 "Compact segment our bread & butter: Y K Koo")
Korean carmaker Hyundai Motor is on a roll in India, which in 2015 took over Europe to become the third largest market after China and the US. Y K Koo, managing director and chief executive officer of the second biggest car maker in India, speaks to Ajay Modi on the road ahead.
India has emerged the third-largest market for Hyundai. What are the future possibilities?
We outsold the 28 European countries last year. India is continuously growing and we will keep the momentum going. India’s GDP is growing at seven to eight per cent and the purchasing power is going up. India contributes 13 per cent to our global sales.
Right now, we have an annual capacity of 650,000 units but can stretch it to make 720,000 units. For the next three years, till 2018, we are well placed to meet the demand. We can manage both domestic and export volumes till then. The Asia and West Asia export market has slowed and we can meet growing domestic demand. We do not have any immediate capacity addition plans. We are not in a race to be number one. We only want to maintain leadership and remain a brand of choice.
What are the challenges of operating in the Indian market?
Events like diesel ban are not right and can’t lead to a reduction in pollution-levels. Many cars don’t even comply with BS-I and II norms. These must be removed.
What will be the growth segments for you?
When I was here in the late nineties, the entry level small cars formed 60 per cent of the market. Now, it is just 10 per cent while compact segment has grown to claim 50 per cent of the total market share. The next phase of growth will come from the small and large SUV segment, now 15 per cent.
The small entry-level car does not excite you any more?
We have the Eon and that is enough to cater to that segment. We will focus on the compact segment. This is now our bread and butter. If we lose the volume here, we can’t remain a leader.
India has emerged the third-largest market for Hyundai. What are the future possibilities?
We outsold the 28 European countries last year. India is continuously growing and we will keep the momentum going. India’s GDP is growing at seven to eight per cent and the purchasing power is going up. India contributes 13 per cent to our global sales.
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Your top competition is talking about selling two million units a year by 2020. Can we see a million units from Hyundai by then? How soon will you need a third plant?
Right now, we have an annual capacity of 650,000 units but can stretch it to make 720,000 units. For the next three years, till 2018, we are well placed to meet the demand. We can manage both domestic and export volumes till then. The Asia and West Asia export market has slowed and we can meet growing domestic demand. We do not have any immediate capacity addition plans. We are not in a race to be number one. We only want to maintain leadership and remain a brand of choice.
What are the challenges of operating in the Indian market?
Events like diesel ban are not right and can’t lead to a reduction in pollution-levels. Many cars don’t even comply with BS-I and II norms. These must be removed.
What will be the growth segments for you?
When I was here in the late nineties, the entry level small cars formed 60 per cent of the market. Now, it is just 10 per cent while compact segment has grown to claim 50 per cent of the total market share. The next phase of growth will come from the small and large SUV segment, now 15 per cent.
The small entry-level car does not excite you any more?
We have the Eon and that is enough to cater to that segment. We will focus on the compact segment. This is now our bread and butter. If we lose the volume here, we can’t remain a leader.