The Indian unit of Hyundai Motor is getting aggressive with product plans as it aims to tap the increasing popularity of utility vehicles.
The nation's second largest car maker plans to launch a compact sport-utility vehicle and an SUV-look-alike crossover in the second half of 2015, trying to repeat its success in India in the past 17 years with compact hatchbacks and sedans, said a person with knowledge of the plans. It is investing as much as Rs 1,500 crore on developing the two products.
Hyundai has put in Rs 1,000 crore to develop the compact SUV, which is based on the ix25 SUV platform and is codenamed GS. The SUV will be built with 90% components sourced locally, which should help keep cost and price low. It will be pitted against the Ford EcoSport and Renault Duster.
The company has also decided to develop a crossover, either on the Verna or Elite i20 platform, with an investment of Rs 500 crore for India, the person said. That vehicle is also slated for launch in the second half of 2015. It will be followed by a multi-purpose vehicle in 2016, which will likely compete with the Maruti Ertiga, Toyota Innova and Honda Mobilio.
Rakesh Srivastava, senior vice-president of sales and marketing at Hyundai India, didn't provide details on the launch plans. "Hyundai is very strong in the compact and sedan segments and has huge acceptance of its products. We will further extend it by our product lineup by bringing in a series of products in the SUV and MPV segments while continuing to improve on the compact and sedan category," he said.
Hyundai is already present in the premium SUV segment in India with the Santa Fe, which has not done so well, selling only around 175 units a month. Analysts say if priced well, the product can succeed. "Looking at the customers' preference over last two years, demand for both SUVs and MPV will increase in coming years. If OEM (original equipment manufacturer) prices the product competitively, they will be able to increase their market share in this segment," said Abdul Majeed, partner at PricewaterhouseCoopers.