While the Hyundai Grand i10 won the most coveted prize in the Indian automobile industry—the Indian Car of Year (ICOTY) award 2014—the newly launched Hyundai Xcent has moved to the second position in its segment within a month of its introduction. “The Xcent has shaken up the Indian small sedan segment,” says Rakesh Srivastava, senior vice-president, marketing & sales, Hyundai Motor India Ltd (HMIL). In an interaction with FE’s Vikram Chaudhary, he shares that above the i20, there is room for a very premium hatchback. He also tells us that the company’s objective is to be the most loved brand in India. Excerpts:
You have planted the 1.0-litre engine in the Eon, which earlier came only with the 0.8-litre engine. Does the Eon really needs a more powerful motor?
We believe in graduating our customers over time. The Eon was launched with the 0.8-litre Epsilon engine, and now it also gets the 1.0-litre Kappa engine option for people who want a more powerful Eon. The Kappa motor primarily powered the i10 and was being made at 100% capacity utilisation. As we added new models to our line-up that were to use the Kappa engines, we had to simultaneously enhance the engine’s production capacity. We also found that there were customers who liked the design of the Eon but wanted a more powerful variant of the car. So, the minute we got more Kappa engines, we planted some of them in the Eon. We gave the customers what they wanted.
Do you believe the new Xcent can match up to the success of the Grand i10, the car the Xcent itself is based on?
The Grand i10 is a phenomenal success. It won the ICOTY 2014 award. Then, in its first full month of production, it broke into the top five best-selling models in India. We have learnt that as we launch a successful product, our channel gains more confidence and the channel interaction with the customers improves. That results in better feedback from the customers—what they love, what they don’t, etc. This helps us, as a company, in designing a new product; in this case, the Xcent. If the Grand i10 was a benchmark that we set, the Xcent, we hope, will be a bigger success than the Grand i10. (Here I must add that when we gave the product briefing to our R&D team, we said that we need a very desirable car at an amazing price. And the result was the Xcent.)
You seem to be very confident about the Xcent…
Our confidence is based on the confidence of the customer. In fact, in the first month of the Xcent’s launch, it was able to move to the second position in the Indian small sedan segment, overtaking another brand that was launched a year ago. While the leader dropped by 18% in volume, the car that earlier held the second position dropped by 40% in volume. The Xcent sold about 6,300 units and moved to the second position. The Xcent, I must add, has shaken up the Indian small sedan segment. The Xcent effect is this: If last month the industry declined by about 8%, we grew by about 9%. Also, last month we posted a market-share of 19% in passenger vehicles and 25% in passenger cars.
What the Xcent and the Grand i10 did to the competition, the new City did to the Verna and the new Corolla may do to the Elantra…
The market is dynamic and companies are coming out with new products. But competition is not new to Hyundai. Yes, any new product draws volumes because of the novelty factor it enjoys, but beyond that, it will succeed only if it has a value-proposition attached to it. We are keenly watching the market.
You now have five hatchbacks in India, one more premium over the other, from the Eon to the i20. Does this range stop at the i20 or do we see the i30 hitting the Indian market any time soon?
Hatchbacks remain India’s favourite cars and enjoy a 68% market-share. Yes, the i20 is among the finest hatchbacks in the country, but we also believe that above the i20, there is room for a very premium hatchback. Therefore, we are planning to come up with a new car that will be slotted above the i20. People are going to love it because it will give them easy manoeuvrability in a congested city environment along with the luxury and space associated with a mid-size sedan.
So, we believe it is the i30, after all…
Well, we are still working on the nomenclature.
Will it be launched before Diwali?
Around that time, maybe.
Will it be priced under Rs 10 lakh?
A few days ago it was reported that Hyundai is ‘voluntarily’ recalling 2,437 units of Santa Fe SUVs manufactured between June 26, 2011, and September 26, 2013. Is the ‘recall’ still a bad word in the industry?
A few years ago ‘recall’ was considered to have a negative impact on the brand. But as the industry has progressed, a recall now is seen as a progressive step by the manufacturer. In today’s time, it shows the consciousness on the part of the manufacturer towards customer satisfaction. For example, a car has almost 10,000 parts, supplied by various vendors. We have processes to check the quality at different levels and identify and solve a problem in the initial stages itself. However, at times, some slight problems are discovered at a later stage. So, a recall is today a progressive step and shows the strength of the manufacturer to identify and solve any issues that are in the product. But, if in a product recalls happen very often, that is not a good thing. In the case of the Santa Fe, we identified a faulty stop lamp switch and are replacing it at no cost to customer.
The year, until now, has been good for Hyundai. Isn’t it?
Yes, the new Santa Fe has been received very well by the buyers. The Xcent, as I said, has shaken up the market. The 2014 Verna has also been loved by the customers in its segment. By this year-end we may come up with a new, very premium hatchback. And by next year we will launch our compact SUV in India.
While we are growing in volume and are increasing our market-share, our objective is to be the most loved brand in India.