The Korean passenger car major Hyundai Motors, which is all set to launch its small and trendy Santro car next month in the Indian market, has projected a monthly cash-flow (sales revenue) of about Rs 200 crore from the very first month of its commercial launch.
Hyundai Motors India Ltd (HMIL), the wholly-owned subsidiary of the Korean chaebol, which has tied-up with a leading multinational bank last week for its cash clearing operations, has also projected a total sales turnover of Rs 2,000 crore for the first full year of operations (1999-2000).
According to sources close to the company, the company also expects to reach the break-even level in the third year of its operations in the Indian market. This is based on the projection that its annual sales turnover will average about Rs 2,000 crore.
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The company expects a significant amount of cash flow in the initial months by way of booking money for the car.
HMIL will have as many as 47 collection centres across the country initially.
According to the company spokesperson, the company is targeting a sales figure of 10,000 cars till December-end 1998 and a total sales of 30,000 in fiscal 1998-99. The company expects to sell about 65,000 to 70,000 Santros in 1999-2000, the first full year of its Indian operation.
The banking sources, however, said the company which was initially targeting an annual sales figure of one lakh in the first full-year of its operations, has now made a realistic projection of 70,000 cars because of the depressed market conditions in India.
Even with a sales volume of 70,000 per annum, Hyundai is expected to make a significant dent in the small car segment, eating into the market share of market leader Maruti Udyog Ltd. This, according to industry analysts, is because of the low annual growth rate the domestic industry is projected to register in the coming few years.
In fact, in the first five months of the current fiscal, the small car segment has registered a decline of 2.1 per cent compared to the corresponding period last year.
Despite the general slump in the domestic auto industry, the small car segment has managed to post a growth rate of 3.7 per cent last fiscal. However, market leader MUL, which sold about 2.4 lakh cars in this segment last fiscal, expects a flat year this fiscal.
With Daewoo Motor's Matiz and Telco's small car also set for launch by the end of the current year, MUL's market share is expected to get further eroded in the coming years.