The new Elantra is positioned in the mid-premium executive sedan segment in India that sells 1,000 units a month.
23 Aug 2016 | 7261 Views | By Shobha Mathur
Hyundai Motor India, which launched the sixth-generation Elantra in New Delhi today, is targeting sales of around 350 units of the executive sedan a month. The company aims to cash in on demand in the festive season which begins in a couple of weeks.
The new Elantra is ...
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Hyundai Motor India, which launched the sixth-generation Elantra in New Delhi today, is targeting sales of around 350 units of the executive sedan a month. The company aims to cash in on demand in the festive season which begins in a couple of weeks.
The new Elantra is positioned in the mid-premium executive sedan segment in India that sells 1,000 units a month. This vehicle segment has been experiencing a decline of 33 percent over the past six months on a YoY basis. With the new Elantra, Hyundai is gunning for a market leadership position in this segment and is bullish about a renewal of interest from customers who are looking for an upgrade from an earlier or lower category model. “This happens whenever a new brand comes in, like in the case of the SUV segment which was declining last year but with the launch of the Creta picked up growth and today is growing at a higher pace than the passenger car market,” says Rakesh Srivastava, senior vice-president (sales and marketing).
The new Elantra will be brought in as a CKD kit and the carmaker will look at local manufacturing only when sales volumes are good. Last year, this market size was around 18,000 units-strong but between January-July 2016 has dipped to 1,000 units per month, translating into around 12,000 units for this calendar year.
Justifying the rollout of the new Elantra in a declining market segment, YK Koo, managing director and CEO, Hyundai Motor India, said: “We will bring in new products, new designs and new technologies even if the volume is small. Globally, the Elantra has notched sales of 11.5 million units in the last 26 years. It has large volumes in China as well. Even if it sees lower volumes in India, we want to give the new product to the Indian customer.” From August 2012 till July this year, the existing Elantra sold 13,812 units or around 250 units per month, 4,187 of them petrol and 9,625 diesel. Hyundai is targeting 55 percent sales of the diesel-engined Elantra, with the balance 45 percent contributed by the petrol variant.
With growing awareness of safety in India, Hyundai has packed the Elantra with a number of safety features. Fifty-three percent of its structure is made of Advanced High Strength Steel (AHSS), an additional 32 percent increase over the previous generation model. AHSS components are used to increase stiffness of chassis and protect passengers effectively in the event of a collision. The sedan also gets six airbags, dual airbags and anti-lock brake system (ABS) with EBD as standard, Electronic Stability control (ESC), Hill Start Assist Control (HAC) and Vehicle Stability Management (VSM).
Tucson coming soon
The Elantra premium sedan, available in nine variants in both petrol and diesel, will be followed by the Tucson SUV rollout in October-November 2016. This was confirmed by YK Koo on the sidelines of the Elantra launch. The Tucson, showcased at the Auto Expo 2016, will have some local content and will be made in India. The Tucson will be positioned in between the Santa Fe and the Creta SUVs.
With the two new models –the Elantra and the Tucson – Hyundai is bullish of a 25 percent growth in demand during the festive season. “In the last couple of years, we faced a challenge but this time we believe we will have one of the best festive seasons. This is based on two strengths – the monsoon has been very good and evenly spread and will lead to a spurt in demand as far as rural sales are concerned. Secondly, the Seventh Pay Commission arrears will be given by the end of August according to the last stipulation. So with rural sales, government circles and the economy faring well this year, it will be the best of festival periods,” says Srivastava.
Interestingly, the new Elantra is also the first Hyundai model to come equipped with an infotainment device and android features. These will be further expanded in upcoming models. The strategy to drive sales of the new Elantra will be to push the market with a good product, competitive pricing and a special customer care programme that will include an offer of 3 years unlimited kilometres, free maintenance for 3 years/30,000km, 3-year roadside assistance, 3 times update on map care and 3-time customer home visits.
The petrol trim of the Elantra powered by the 2.0-litre Mpi motor comes in manual and automatic transmissions and has an introductory price of Rs 12.99 lakh with the top-end SX (O) variant priced at Rs 17.99 lakh for the AT version. For the diesel variants, powered by the 1.6 VGT CRDi motor, pricing starts at Rs 14.79 lakh for the MT trim with the top-end version costing Rs 19.19 lakh for the SX (O) version of AT.
The new Elantra’s introductory price will run till December 2016 and is expected to woo customers. Koo says this is a good marketing and sales strategy followed by most companies at the time of the new model launch. Expect prices to be raised from January 2017.
Production ramp up for game-changing Creta
At the Auto Expo 2016 in February, Hyundai had announced plans to launch a couple of new products each year. The Creta SUV and Elantra are in line with that promise. The Creta has been a runaway success and production has been ramped up to 13,000 units a month at the Sriperumbudur plant in Chennai. This comprises 7,500 units for the domestic market and the balance for exports. While the waiting period for the Creta in the domestic market has been halved to a month and a half, for the export markets it has risen to six months.
With the Creta being shipped to 92 countries, Koo admits Hyundai is now looking to increase production for exports further.
It is also learnt that the petrol-engined Creta is seeing a spurt in demand with petrol sales now comprising about 20 percent from a negligible amount earlier as a fallout of the nine-month diesel ban enforced by the Supreme Court on above 2000cc diesel engines in the Delhi-NCR region.
In CY 2015, HMIL sold 476,001 units in the domestic market and is looking at achieving half-a-million sales in the domestic market in CY 2016.