Hyundai India, India’s second largest automaker, is moving forward with its plan to launch six models of electric vehicles (EV) by 2028 as it believes EVs would lead India’s journey towards sustainability. As the South Korean auto major is set to post its highest annual sales in the country since it started production in the Indian market in 1998, Hyundai India Director (Sales) Tarun Garg Mihir Mishra shares this high inflation and interest with rate hikes and Russia-Ukraine -Conflict are the unknowns that could affect growth. Edited excerpts:
What is the festive demand like this year?
We have about 8 to 9 percent more bookings than last year, which is very good. Despite global headwinds, 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’m very proud that we can contribute to the economy, pay taxes and also from a customer perspective we’re able to generate that kind of excitement and continue to meet your needs.
Even buying a car as a side issue is an indication of the feel-good factor. So, higher auto sales reflect the overall sentiment in the country and in the economy.
Are you worried about the slowdown in the economy?
We must be aware that somewhere there is an unknown element: rising interest rates, rising inflation and fuel prices, the Russia-Ukraine conflict. There are many uncertainties. So we have yet to see how things move. But as of now – so far, so good. We are looking at the highest sales figures since Hyundai’s launch in India (1998).
There is a feeling that the post-pandemic recovery has been fairly good in urban areas, but the rural economy has been hit much harder due to Covid. Is rural distress reflected in your sales figures?
You are right that the economy in rural areas has taken a hit… At the same time, roads in rural areas have become much better now, especially for cars, now urban-rural connectivity is much better. It wasn’t that good before. For us, rural sales contributed about 17 percent of our total sales, and that’s still the case today. I would say consistently.
Buying behavior changed during Covid to reduce physical contact. As the pandemic subsides, have people started returning to your showrooms or preferring other channels?
First, people never left the showroom. Even during Covid they came to our showroom for delivery. To date, people are using more mobile devices for pre-sale activities – over 15 percent of Hyundai buyers now spend part of their journey online.
About 30 percent of my inquiries now come from online sources. Regarding the pre-sale, many activities have started online.
So, … part (of the market) definitely stayed after the pandemic. However, buying a car in India is still a very emotional thing. The person wants confinement to a priest and family, which still happens.
Should we expect a hybrid vehicle from Hyundai in the future or will you just stick to your battery electric vehicle plans?
Because we are part of such a strong parent company, we have access to all technologies, whether hybrid fuel cells, electric vehicles, petrol and diesel, turbo, etc.
As you can see, both central and state government policies (in terms of incentives etc.) seem to be more battery (electric vehicle) oriented. So we want to align with what the government wants… As a policy choice, we believe that’s what the government wants and that’s clean mobility, so we’re going to stick with that.
I think a lot of coexistence will happen eventually and it’s an evolving process. The spread of electric vehicles worldwide is also in the early double-digit range. India has gone from 0.4 percent to 1.2 percent in two years, but there is still a long way to go. Much will depend on the government’s push.
Has the availability of semiconductors decreased and would you like to share your thoughts on this?
If you look at these numbers from January to May, the domestic numbers are hovering around 43,000-44,000 units. From June to August and September we are at 49,000 units. So since January, 10 percent has already happened. It should get even better in 2023.
Our wait times have decreased across all models, and we believe wait times should continue to decrease in the future.