Hyundai India, India’s second largest car manufacturer, is moving ahead with its plan to launch six electric vehicle (EV) models by 2028, as it feels EVs would lead India’s journey towards sustainability. As the South Korean car major is set to clock its highest-ever annual sales in the country since its launched production in the Indian market in 1998, Tarun Garg, the Director (Sales) of Hyundai India, tells Mihir Mishra that high inflation and interest rates going up and the Russia-Ukraine conflict are the unknowns that may impact growth. Edited excerpts:
How does the festive demand look this year?
We have about 8 to 9 per cent increase in bookings over last year, which is very good. Despite headwinds globally, India is showing so much resilience, which means domestic consumption is very high.
And despite some challenges, the confidence remains strong, which means we can contribute to the economy and I am very proud that we can contribute to the economy, taxes and also, from a customer point of view, able to generate that kind of excitement and continue to meet their aspirations.
Also, a customer buying a car, which is a non-essential item, is an indication of the feel-good factor. So higher car sales is a reflection of the general sentiment in the country and in the economy.
Does the slowing down of economies concern you?
We have to be aware that there is an unknown element somewhere: interest rates are going up, inflation and fuel prices going up, Russia-Ukraine conflict. There are a lot of uncertainties. So we still have to see how things move. But as of now — so far, so good. We are looking at the highest-ever sales since Hyundai launched in India (in 1998).
There is a sense that the post-pandemic recovery in urban areas has been fairly good but rural economy has taken a much bigger hit due to Covid. Is rural distress showing in your sales number?
You are right that the economy in rural areas has taken a hit … At the same time, what has happened (is) the roads have become much better in rural areas now, especially for cars, now urban rural connectivity is much better. That was not so good earlier. For us, rural sales contributed about 17 per cent of our total sales and that holds even today. It is consistent I would say.
During Covid, buying behaviour changed to reduce physical contact. As the pandemic abates, have people started to return to your showrooms or prefer other channels?
First of all, people never left the showroom. Even during Covid, they would come to our showroom for delivery. As on date, people are using more mobile for pre-sale activity — over 15 per cent of Hyundai buyers today have some part of the journey online.
About 30 per cent of my inquiries are now coming through online sources. In terms of pre-sales, a lot of activities have started happening online.
So, … some part (of the market) has definitely stayed post the pandemic. However, car buying in India is still a very emotional thing. The person wants a delivery with a priest and with family, which continues to happen.
Going ahead, should we expect a hybrid vehicle from Hyundai or will you stick to your battery electric vehicle plans only?
Because we are a part of such a strong parent, we have access to all technologies, whether it is hybrid fuel cell, electric vehicles, petrol and diesel, turbo etc.
If you see, it appears policies (in terms of incentives etc) of both the central government as well as the state government are more aligned towards battery (electric vehicles). So, that is why we want to be aligned with what the government wants … So, as a policy decision, we believe that this is what the government wants and this is clean mobility, so we will go with this.
I think a lot of coexistence will happen eventually and it is an evolving process. Even globally, EV penetration is in the early double digits. India has increased from 0.4 per cent to 1.2 per cent in two years but there is a long way to go. A lot will depend on the government’s push.
On semiconductor, has the availability eased and would you like to share your outlook on it?
If you see those numbers, January to May, domestic numbers hover around 43,000-44,000 units. From June to August and in September, we are at 49,000 units. So 10 per cent have already happened since January. Things should improve further in 2023.
Our waiting periods have come down across models and we believe going forward waiting periods should come down further.
