The Korean carmaker is a late entrant into the burgeoning compact SUV segment but it is very bullish about its prospects. Here's finding out what is fueling Hyundai's confidence.
21 May 2019 | 16543 Views | By Sumantra B Barooah & Shapur Kotwal
S S Kim, who took over as HyundaiMotor India's MD and CEO five months ago, says Hyundai should introduce "much more innovative and much more meaningful technology and functions" with its products to sustain and grow its India success story, which started with the Santro 20 years ago. The ...
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S S Kim, who took over as Hyundai Motor India's MD and CEO five months ago, says Hyundai should introduce "much more innovative and much more meaningful technology and functions" with its products to sustain and grow its India success story, which started with the Santro 20 years ago. The Venue, its first-ever compact SUV, which will see the India launch today, is one such attempt.
The Hyundai Venue will compete against the Maruti Suzuki Vitara Brezza, Tata Nexon, Ford EcoSport and Mahindra XUV 300. The combined sales of these models stood at 268,685 units in 2018-19, which translates to a monthly average of nearly 22,400 units.
Hyundai is eyeing leadership position in the compact SUV market, which it expects to grow at a healthy clip even as the rest of the passenger vehicle market struggles for growth. "Last year, this segment grew more than 25 percent, and we are sure that this kind of a growth will continue. CAGR probably will be around 17-18 percent depending upon year to year," Puneet Anand, Group Head – Marketing, Hyundai Motor India, tells Autocar Professional. Hyundai's ambitious target of pole position in a market with formidable competitors is fuelled mainly by the Venue's offerings of three engine options and a long list of connected features.
Connected with today's buyers
The Venue comes with Hyundai's advanced connectivity Blue Link solution which has an in-built and tamper-proof device powered by Vodafone-Idea eSIM and a Cloud-based Voice Recognition platform from Global AI (Artificial Intelligence) Company.
There are 33 connected features in the SUV, out of which 10 are India-specific features for practical and holistic connectivity with safety, convenience and various vehicle management relationship services, claims Hyundai. The Blue Link services will be complimentary for first three years, after which customers can further renew the services.
The connected features and advanced technology like dual clutch and gasoline direct injection in the 1-litre engine of the Venue are expected to draw customers, primarily the 'Gen Y' customers aged between 25 and 30 years. It is estimated that 35 to 40 percent customers in the compact SUV segment are first-time car buyers, 30 percent are replacement buyers and for the rest it's an additional vehicle.
Anand expects the Venue to draw more first-time car buyers. "We are going to increase the first-time buyers much more than what we have desired," he says. And among Venue's variants, Anand expects the 1.0L to contribute around 40 percent (both transmissions combined) of the model's total sales.
Three's company on the engine front
The Venue will be powered by three engines, the most affordable of which is likely to be the 1.2-litre petrol that puts out 83hp and 115Nm of torque. The more expensive and high-tech petrol is a 1.0-litre, three-cylinder, direct-injection turbo that develops 120hp and 172Nm. The Venue’s mainstay, however, could be the 1.4 diesel that develops 90hp and 220 Nm.
The Mahindra XUV300 diesel and the Tata Nexon both develop more power but Hyundai’s powerplant is likely to be smoother and quieter. The engines will come with a choice of three different gearboxes. While the 1.2 petrol will get a five-speed manual and the 1.4 diesel will get a six-speed manual, the 1.0 turbo-petrol will be offered with a six-speed manual as well as a seven-speed dual-clutch auto. Incidentally, the Venue will be the only dual-clutch in the segment.
Looks a Hyundai but different
On the looks front, the Venue is clearly a Hyundai. What is striking though, and markedly different from other Hyundais in India, is the huge grille, with its large chrome-lined mesh and oversized Hyundai ‘H’ at the centre and the split headlamp unit. There’s a slender LED-equipped strip at the top, while below sits a larger Tata Harrier-like rectangular multi-projector element unit bordered by the LED DRLs.
Unlike the Venue for the US, the Indian car has a lot of cladding in and around the chin, it gets massive wheel arches with 16-inch wheels, and even has a strong shoulder line.
Built on a wheelbase of 2,500mm and almost identical in size to Maruti’s Vitara Brezza, the Venue is, however, the lowest car in its class with its height of 1,590mm. The Venue is 3,995mm long and 1,770mm wide. Hyundai claims that 69 percent of the car is built of high-strength steel and it comes with air curtains around the front wheel for better aerodynamics. While the variant break-up is awaited, top-spec Venues will get six airbags, ESC, hill-assist control and brake assist. Dual airbags and ISOFIX child-seat mounts are expected to be standard fit.
Inside the Venue
The neatly designed dash split horizontally between a darkened top and a lighter coloured bottom. The dashboard design also looks nice because Hyundai designers have clustered buttons and knobs either around the touch-screen or near the central console.
The centre console, in fact, is particularly interesting. It gets a high-set 8.0-inch touch-screen between a pair of air-con vents, a string of shortcut keys below it and further down are chunky looking air-conditioner controls. Being a Hyundai, the Venue is pretty well equipped. There are multiple USB sockets up front, and top-of-the-line cars will get cruise control, wireless charging, an Arkamys sound console, a cooled glovebox, rear air-con vents and even a sunroof. Only the XUV300 has a higher airbag count, at seven.
Is it worth buying?
Of the other things to know, the Venue will come with a 3-year/unlimited kilometres warranty. Hyundai is also confident of offering the lowest cost of ownership. Expect the Venue’s prices to range from Rs 800,000-12 lakh (estimated, ex-showroom). While it won’t be cheap, the Venue packs lot of content.
With the all-new Venue, Hyundai will be gunning for a share of the booming compact SUV market in India and also to increase its overall UV market share. In FY2019, the carmaker increased its UV market share to 13.37 percent from 11.81 percent in FY2018. The Hyundai Creta has had a successful run in FY201 with sales of 124,300 units (FY2018: 107,136 / +16.02%). In fact, in FY2019, the sales gap between the Creta and the market leading Maruti Vitara Brezza has reduced to 33,580 units from 41,326 units in FY2018.
Now with the new Venue in its stable of SUVs and with the official launch today, Hyundai Motor India is targeting sales of 65,000 units in 2019, and over 90,000 units in 2020. The company expects the 1.0-litre variant to contribute to around 40 percent of the Venue's sales in India. The Chennai-based OEM expects over 40 percent of the Venue's sales to come from first-time car buyers with the compact SUV targeted at the 25-30 age group. The company says it has achieved 95 percent localisation with the new Venue with 125 component suppliers, which is necessary for competitive pricing.
Will the Venue expand the market or eat into rivals' market share or do a bit of both? The answer to this won’t be too long in coming.
Q&A: PUNEET ANAND, GROUP HEAD – MARKETING, HYUNDAI MOTOR INDIA
The party in the compact SUV segment continues, but Hyundai is late into it. Do you expect the party to continue for a long time? What is your outlook?
We are very excited with the launch of the Venue. Today, the young generation looks at a car not as a means of transport but also as a third space. That's where this Venue will fill in the gap. Between his/her office and home, I think the Venue will provide a very excellent third space for him or her. Also, if we look at the various powertrain options which we have given in the product which hitherto is one of the best in the segment, it also gives the confidence that 'Yes, we have been able to give the customers what they have been long demanding’.
The combination of the 1.0-litre turbo with the seven-speed DCT, also the availability of a diesel engine and another petrol engine with manual transmissions give a lot of area for people to enjoy this product. Going forward, we will continue to excite the market. I'm sure the Venue will redefine the way people have been looking at the sub-4-metre segment.
What share do you expect for the 1-litre engine in Venue's overall sales?
Well, the 1-litre is a very aspirational product. It will be one of the top-end products from our platform, and the way I look at the adoption of technologies from the people, I am sure somewhere about more than 40 percent of the overall (Venue) portfolio will be taken up by the 1-litre engine, because it's a very unique segment.
Will the 1-litre engine power other Hyundai cars?
We are a very evolving company. Yes, the 1-litre is a first product from Hyundai. Once we understand the customers' desires, why not strap it in other products also? We have very strong products like the i20 and Grand i10 and we'll be bringing such engines in higher-end models too.
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