Hyundai Turns on the 'Emergency Blinkers'... Falls Short of Annual Sales Target in India

Unchallenged Second Place Since 1996 Entry
Cumulative Sales This Year: 529,462 Units
Mahindra Overtakes with 574,657 Units
Difficult to Achieve 610,000-Unit Target

Hyundai Motor Company has lost its long-held position as the second-largest automaker in India, which is considered the world’s third-largest automobile market after China and the United States. Local companies are rapidly catching up, raising concerns that Hyundai may not achieve its annual sales target this year. The company’s recent organizational restructuring, which elevated India to an independent regional division, is interpreted as a response to this sense of crisis.

According to each company and local media on December 12, Hyundai Motor India (HMI) recorded cumulative sales of 529,462 units (excluding exports) from January to November this year. During the same period, local company Mahindra sold 574,657 units, surpassing HMI.

Jose Munoz, President of Hyundai Motor Company, is speaking at the Hyundai Motor CEO Investor Day, held for the first time in India in October. Photo by Hyundai Motor Company

If there are no changes in this month’s sales figures, HMI is highly likely to lose its “second place” market share title. Tata Motors is also closing in on HMI, having sold 528,726 units. Maruti Suzuki, whose largest shareholder is the Japanese automaker Suzuki, is expected to maintain its top position with sales of 1,634,869 units.

The gap has widened further since the Indian government’s Goods and Services Tax (GST) reform in September, which lowered taxes on low-priced models. Last month, HMI sold 50,340 units, up 4.3% from the same month last year, while market leader Maruti Suzuki sold 170,971 units, a 21% increase.

Tata Motors and Mahindra also outperformed Hyundai for the third consecutive month, selling 57,436 units (up 22.0%) and 56,336 units (up 21.9%), respectively, compared to the same month last year.

Over the past decade, the Indian market has seen an explosive increase in SUV popularity, and local companies are capitalizing on this trend. Mahindra boosted its sales with models such as the Scorpio (15,616 units sold in November) and XUV3XO (10,601 units), while Tata Motors led with the Nexon (22,434 units) and Punch (18,753 units).

Additionally, the “Make in India” policy promoted by Prime Minister Modi, combined with a backlash against foreign brands that have dominated the market, has increased the preference for domestic brands, which is also seen as a factor in HMI’s sluggish sales.

Hyundai set its sales target for India this year at 614,000 units, but achieving this goal appears difficult. If monthly sales do not exceed 70,000 to 80,000 units this month, it will be challenging to surpass 600,000 units. Since establishing HMI in 1996 and entering the Indian market, Hyundai has consistently maintained second place. In 2023, its sales surpassed 600,000 units (602,111 units) for the first time, and last year it recorded 605,433 units.

Industry analysts attribute Hyundai’s recent struggles to the aging of core models like the Creta, while other companies have enjoyed relatively strong sales. Last month, Hyundai’s main models, the compact SUVs Creta and Venue, sold 17,344 units and 11,645 units, respectively.

Organizational Restructuring: India Becomes an Independent Region, 7 Trillion Won Aggressive Investment... Launch of the New Venue

Hyundai recently separated India from the previous India-Middle East regional division and reorganized it as an independent region. Tarun Garg, a local executive and Chief Operating Officer (COO) of Hyundai Motor India, was appointed as the regional head, while Park Donghui, the new Executive Vice President of the Middle East region, was appointed as COO of Hyundai Motor India. The company is also launching aggressive investments and expanding its supply. At a local investor briefing in October, Hyundai announced plans to invest 450 billion rupees (about 7.3 trillion won) by 2030 and to launch 26 new products, starting with the new Venue released last month.

Compact SUV Creta. Hyundai Motor Company

At the group level, Hyundai Motor Group also plans to develop India into the world’s second-largest market after the United States. Hyundai Mobis recently established a software research branch in Bengaluru, India. Together with the integrated research center in Hyderabad established earlier this year, the company will operate a dual-track R&D policy that reflects regional characteristics.

According to the Korea Automobile Research Institute, India, with a population of 1.45 billion, is the world’s most populous country, but its automobile penetration rate is only 34 vehicles per 1,000 people-one-tenth the level of the United States and Europe-making it a market with high growth potential. Kia chose India as the launch market for the second-generation compact SUV Seltos, setting an annual sales target of 100,000 units, which accounts for 23% of its global goal of 430,000 units.

Professor Kim Pilsoo of Daelim University said, “Competition is extremely fierce as local companies like Mahindra are growing rapidly. Companies must implement locally tailored strategies in everything from research and development to parts and vehicles.”

This content was produced with the assistance of AI translation services.