Completing 20 years in India this year, Hyundai Motor India feels that India has become safer and more stable as country to do business in. Managing director YK Koo, in an interview to Sandeep Singh and Anil Sasi said that while the infra cess was unexpected, both customers and industry remain wary of the policy surrounding diesel cars. Excerpts:
Recently we saw some agitation in Haryana that affected businesses and in the past there have been cases of labour unrest. Do such developments bother you as you do business in India?
India is a large country. While, at times, unexpected situations develop I think overall, in comparison to the past, India has become a much safer and more stable country to do business in. The present government at the Centre is pushing the market and is pushing for Make in India which is providing manufacturing support. I think the workforce has also matured now. We
recently signed a three year long-term wage settlement with the recognised union for the period between April 2015 and March 2018. Though it took some time, it was very peaceful.
How concerned are you with the infrastructure cess?
While we were expecting some motivation for the sector, the infra cess was little unexpected and, yes, it does concern us in the short-term. However, I feel that it will be there in people’s minds for three to four months and may affect some sales but it may not impact the industry in the long-term.
Are you worried that the ban on certain categories of diesel cars in Delhi may get extended and that there is no clarity on policy regarding the same?
Concerns exist but the market is also shaping accordingly. In 2013, the contribution of diesel cars in our total sales portfolio was 52 per cent and it came down to 44 per cent in 2015. For the last two months it stood at 42 per cent. The concerns have led to a decline in demand as there is some anxiety that the ban may get extended to other cars and cities. While Delhi is a big market and it has seen a decline in demand for diesel cars, other centres are also witnessing an impact.
How do you plan your growth going forward?
In the near future we will come out with a compact SUV that we are developing at the Global R&D centre. It will be a India-specific product. We plan to keep on bringing in new products in segments that we don’t have a presence in while refurbishing existing products. We will come up with two new products every year and are planning to develop new products for the Indian market.
Do you think you will be late in entering the sub-4 metre SUV segment?
I don’t think so. The sub 4 metre SUV market is still not mature and the volumes are less so far. Maybe in a couple of years when the market matures, it will be the time for us to make the product introduction. Even for Creta, the segment was not mature earlier and there were few products. We came in with the right product when the market matured and we are doing average monthly sales of 7,000 and are looking to scale it to 10,000 a month from June 2016.
How do you see SUV market shaping up?
Earlier the SUV market was very small at around 5 per cent but now it has grown to 15 per cent. Since India is a large country with challenging road conditions, I think SUVs are the right product for this country. As diesel concerns remains, I think customers may go for petrol variants. While over 90 per cent of all SUV sales are diesel, in case of Creta we have seen it coming down to 80 per cent.
While your competitors are using AMT and CVT technologies, is Hyundai looking at them?
We have discussed bringing Automated Manual Transmission (AMT) and hybrid products and now we are working on it.