An auto company or car maker IPO anywhere in the world is a rare yet eagerly awaited and anticipated phenomenon. The lure of investing in a familiar auto brand entices investors like nothing else.
Consider this: in November 2010, General Motors (GM) raised a record $20.1 billion in its initial public offering. GM’s second debut on the NYSE – then the largest initial public offering in US history – ushered in a new era of renewed optimism for the company and the US economy. This coincided with China becoming the largest auto sales market in the world.
In May 2024, Zeekr (Zeekr Intelligent Technology Holding Ltd.), the premium brand of Chinese automaker Geely (a Hong Kong-listed company), upsized its IPO to sell 21 million American Depositary Shares (ADSs) at $21 per share. It had earlier planned to sell 17.5 million ADSs. Zeekr raised $441 million, and the IPO valued the company at about $5.1 billion. The Zeekr listing was the biggest Chinese flotation on the US stock exchanges since 2021, when LianBio listed its shares in New York.
Closer to home, Maruti Udyog went public in 2003. At that time, the Indian government divested a 25 per cent stake at Rs125 per share. At the public issue price, the company was valued at around Rs3,600 crore. Suzuki’s Rs5 per share investment in Maruti 43 years ago is now valued at Rs12,760 per share as of 9 October 2024.
As of October 2024, Hyundai (pronounced Hun-Day) Motor India Ltd. (HMIL) is taking centre stage in India, which is racing towards being ranked as one of the top three economies in the world. HMIL, part of the Hyundai Motor Group (HMG) – the third-largest auto OEM in the world based on passenger vehicle sales in CY2023 (CRISIL report) – announced the launch of the largest-ever IPO in India, aiming to raise Rs27,870 crore at Rs1,960 per equity share (the upper end of the price band). The implied market cap will be more than Rs1.59 lakh crore (trillion). Maruti Suzuki has a total market cap of over Rs4 lakh crore as of 9 October 2024; Tata Motors Rs3.46 lakh crore; and Mahindra & Mahindra Rs3.92 lakh crore. The HMIL IPO has an employee reservation of up to 778,400 equity shares.
Progress of humanity
“At Hyundai, we look beyond for the Progress of Humanity. Everyone looks at the world today; at Hyundai, we look beyond. With experiences that take us forward, innovations that are intuitive, and technology that empowers humanity. Some said electric is the future – we said why stop there. Everyone looks at the world today, but at Hyundai, we look beyond for the progress of humanity, and you are welcome to join us. A car for every Indian. When in India, be Indian,” says Unsoo Kim, MD of HMIL, while greeting the media, brokers, analysts, and influencers during the domestic retail roadshow IPO conference with a ‘Namaste’. He pointed out that India is one of the most exciting auto markets in the world at this point in time.
During Fiscal 2024, the growth momentum of the Indian auto industry continued, albeit at a slower pace, backed by continued traction in the SUV segment, intermittent launches, and an improvement in disposable income. Off the high base of Fiscal 2023, the industry grew by 8.4 per cent in Fiscal 2024 to reach a historic high of 4.2 million units. During Q1 FY25, the industry witnessed a million-vehicle offtake, an approximately 3 per cent year-on-year increase. Hatchbacks continued to remain under pressure, while the SUV and MPV segments primarily drove industry growth.
The Indian auto industry has witnessed a CAGR of ~5 per cent over both a five-year and 10-year basis, largely driven by higher-segment cars with premium features (SUVs). With OEMs looking to increase the software/technology content of vehicles further in the coming years, coupled with a slew of EVs planned for the market, the industry’s growth looks set to come from the premium segment of cars. CRISIL expects the CAGR to be in the range of 4.5 to 6.5 per cent for the next five years
Hyundai Motor Company’s (HMC) global ecosystem gives HMIL a strategic and competitive advantage. HMC’s technology prowess and R&D give HMIL early access to the latest global trends, leading to a shorter time to market. HMC has invested an aggregate amount of Rs1,87,503 crore ($26.04 billion) towards global R&D from CY2014 to 30 June 2024, including in emerging mobility areas such as electrification, shared mobility, and autonomous driving. HMC has made a cumulative investment of over $26 billion in global R&D. HMC’s global platform provides access to export opportunities and best-in-class practices and processes. HMC’s sales network spans more than 190 countries.
HMIL has been the second-largest auto OEM in the Indian passenger vehicle market since Fiscal 2009 (in terms of domestic sales volumes), according to a CRISIL report. HMIL has been India’s second-largest exporter of passenger vehicles from 1 April 2021 through 30 June 2024. Since 1998, and up to 30 June 2024, HMIL has cumulatively sold more than 12 million units of passenger vehicles in India and through exports. In CY2023, HMIL was among the top three contributors to HMC’s global sales volumes, and its contribution to HMC’s sales volumes has increased from 15.48 per cent in CY2018 to 18.19 per cent in CY2023.
HMIL’s business model is founded on several fundamental pillars, such as the strong parentage of the Hyundai Motor Group brand; advanced technology; localisation; and a win-win approach for all stakeholders and partners, such as customers, dealers, suppliers, employees, the environment, and the community. It identifies emerging market trends and latent customer needs and aspirations based on its local network and HMC’s global network, along with in-depth market and product research.
With over 2,900 touchpoints, Indian customers can browse, test drive, and purchase a passenger vehicle through the network of 1,377 sales outlets operated by HMIL’s dealers across 1,036 cities and towns in India as of 30 June 2024, or purchase through the ‘Click to Buy’ section on its website or ‘myHyundai’ app. For after-sale services of their passenger vehicles, customers can access its network of 1,561 service centres operated by its dealers across 957 cities and towns in India as of 30 June 2024. As per the CRISIL Report, HMIL’s sales and service network was the second largest in India in terms of the number of customer touchpoints as of 31 March 2024.
Pioneer innovator
Hyundai Motor India has been at the forefront of several innovations in the industry. During their early years, they were the first player to introduce the Santro with a ‘tall boy’ hatchback design that offered better headroom and seating height compared to other available hatchbacks in the market at that time. They were also amongst the first to introduce CRDi diesel engine technology in India. HMIL was the first mass market OEM to introduce power steering in India by providing the option for their Santro model in 2006. They also introduced the Kona EV in 2019, which was India’s first long-range EV (452 km Automotive Research Association of India {ARAI} range) by a mass market player in the less than Rs30 lakh price bracket.
HMIL has consistently been the largest auto OEM in India by sales volume in the mid-size SUV sub-segment from Fiscal 2019 to the three months ended 30 June 2024. Their 2016 India Car of the Year (ICOTY) awardee, Creta, had a market share of 38 per cent in the mid-size SUV sub-segment in the three months ended 30 June 2024. Further, Verna was the top-selling model in the premium sedans sub-segment in Fiscal 2024, and Aura was the second highest selling model in the sedan segment with a 15 per cent market share in the three months ended 30 June 2024, according to the CRISIL Report.
“As a result of our consistent scale and leadership, we believe that we have garnered trust and loyalty for the Hyundai brand among existing and potential customers in India. Our scale and leadership position also gives us the ability to attract new dealers and derive economies of scale in sourcing and manufacturing operations,” says Tarun Garg, Whole-time Director and COO, HMIL.
They also introduced the Ioniq 5, which was amongst the first premium EVs (greater than Rs30 lakh price bracket) launched in India by a mass market player. They were also amongst the early players to launch connected car technology via Bluelink and have been responsible for introducing a slew of new-age features in their portfolio, like Daytime Running Lights (DRLs), an Air Purifier, and a Dash Cam with recording capability. Further, they were also the first to introduce a panoramic sunroof in the mid-size SUV segment.
Hyundai Verna has obtained a 5-star rating according to the most recent criteria set by Global NCAP in 2023. The Verna was assessed in its most basic passive safety specification, with 6 airbags and ESC as standard. The model achieved a five-star rating for adult and child occupants.
In a 2022 publication by Global NCAP, Hyundai i20 (2 airbags) and Hyundai Creta (2 airbags) obtained a three-star rating. Hyundai Motor India is the first mass market OEM in India to standardise six airbags across all its models and variants under its ‘safety-for-all’ mission in October 2023. Apart from that, Hyundai Motor India has also standardised three-point seatbelts and seatbelt reminders as standard safety features across all variants.
An eminent auto industry expert points out that HMIL’s right to win is democratising access through innovation, wherein it offers something for everyone. Hyundai is an award-winning brand with a track record of leadership. HMIL has a win-win approach across stakeholders. It has flexible, localised, and automated manufacturing. It has a future-ready orientation. It has been delivering growth at scale with industry-leading profitability and returns.
HMG has invested Rs30,103 crore ($5.09 billion) in India operations (as of 30 June 2024) in tangible fixed assets and capital work in progress. “With the support from HMC, we have built the first and second-largest manufacturing and supply chain ecosystem within the Hyundai Motor Group outside Hyundai’s home country, Korea. We believe that our large network of suppliers, dealers, and other key stakeholders has helped create multiple job opportunities across the OEM value chain in India. We serve as a production and export hub for emerging markets for HMC, particularly for passenger vehicle models such as Verna and Venue,” says Kim. The new initiatives involve an investment commitment from our company of approximately Rs32,000 crore in aggregate, adds Kim.
Gopalakrishnan CS, Whole-time Director and CMO, says: “Our Chennai manufacturing plant had an annual production capacity of 824,000 units as of 30 June 2024. We are expanding our manufacturing capabilities in India with the recent acquisition of a manufacturing plant in Talegaon, Maharashtra, which is expected to commence commercial operations partly in the second half of Fiscal 2026. We expect our annual production capacity across the Chennai and Talegaon manufacturing plants in aggregate to increase to 994,000 units when Talegaon is partly operational and to 1,074,000 units once Talegaon is fully operational.”
In line with their commitment to India, HMIL is taking steps to develop an EV supply chain and manufacturing capabilities in India through EV parts localisation and developing an EV platform in India. HMIL is undertaking research and development on cost-effective green hydrogen energy in collaboration with the nodal agency for investment promotion of the Government of Tamil Nadu and IIT Madras. Pursuant to an arrangement with the Government of Tamil Nadu dated January 2024 for the development of EV manufacturing infrastructure in the state, HMIL may receive incentives and subsidies from the Government of Tamil Nadu upon entering into a separate memorandum of understanding in this regard.
For the Talegaon plant, which is yet to commence operations, they received offer letters from the Government of Maharashtra in November 2023 and March 2024, under which it is required to make a fixed capital investment of Rs6,000 crore in fixed assets to avail incentives such as (a) an industrial promotion subsidy equivalent to 100 per cent of the fixed capital investment in Talegaon made within a period of 7 years from 1 April 2023 by way of a refund of 100 per cent of the SGST payable in the state of Maharashtra on sales of cars and parts manufactured and sold in Maharashtra, within a period of 20 years; electricity duty exemption for a period of 15 years from the date of commencement of commercial production; and a 50 per cent exemption from payment of stamp duty on the assignment of land lease.
EV strategy
HMIL’s calibrated EV strategy includes the launch of innovative models backed by the localisation of the EV supply chain. HMIL’s overall PV strategy and specific EV strategy have revolved around the thesis of launching the ‘right product at the right time’, and this approach has worked successfully for the company. “HMIL has access to HMC’s global EV and battery technology, and our strategy will be more localised, catering to the needs of Indian customers,” says Garg.
HMIL plans to launch 4 EV models across the mass volume/mass premium segment (with the first local EV model, Creta EV, expected in Q4 FY 2025). “In line with our commitment to India, we are taking steps to develop an EV supply chain and secure manufacturing capabilities for key parts, including battery packs, cells, power electronics, and drivetrains. For localising battery cell production, HMIL is collaborating with an Indian local partner to establish local production and supply-chain capabilities.”
HMIL focuses on the continued premiumisation of its passenger vehicle portfolio. It has a premiumisation strategy that centres on selling passenger vehicles with a higher average selling price (ASP) for the respective models. With a growing share of younger buyers in India, there is an increasing awareness and preference for parameters other than price, such as exterior and interior design, driving experience, safety, advanced features, and aesthetics. This trend has resulted in inter-segmental shifts towards SUVs and intra-segmental shifts towards mid- to top-end variants. This is demonstrated by the growing ASP of passenger vehicles in India, which increased at a CAGR of 7-9 per cent between Fiscal 2019 and Fiscal 2024, according to the CRISIL Report. In line with this trend, the contribution of passenger vehicles with an ex-showroom ASP of greater than Rs10 lakh to its domestic sales has increased from 43.42 per cent in Fiscal 2022 to 48.55 per cent in Fiscal 2024, and was 46.86 per cent in the three months ended 30 June 2024.
Similarly, the contribution of passenger vehicles with an ex-showroom ASP of greater than Rs15 lakh to HMIL’s domestic sales has risen from 13.93 per cent in Fiscal 2022 to 19.81 per cent in Fiscal 2024, and was 21.53 per cent in the three months ended 30 June 2024. Further, HMIL consistently achieves SUV sales contributions that surpass the industry level by sales volumes in units. In Fiscal 2022, Fiscal 2024, and the three months ended 30 June 2024, the contribution of SUV sales volume to total passenger vehicle sales volumes in India was 41.1 per cent, 51.2 per cent, and 53.5 per cent, respectively, according to the CRISIL Report. On the other hand, HMIL’s domestic SUV sales volumes accounted for 52.01 per cent, 63.24 per cent, and 67.41 per cent of total domestic sales volumes in Fiscals 2022, 2024, and the three months ended 30 June 2024, respectively. “We intend to bolster our sales in the SUV segment and mid- to high-range passenger vehicles in other segments through targeted passenger vehicle introductions across price points and powertrains,” says Kim, adding: “We may also explore vehicle leasing to offer last-mile connectivity.”
HMIL intends to leverage local manufacturing capabilities to establish itself as HMC’s largest foreign production base in Asia. It aims to become an export hub for HMC, focusing on exports to emerging markets, including South Asia, Latin America, Africa, and the Middle East, with the potential to export to other global markets.
“Our aim is to be the global manufacturer and supplier of cost-optimised passenger vehicles, including the Grand i10 NIOS, i20, Aura, Venue, Verna, Creta, and Alcazar. We also intend to collaborate with our stakeholders in export countries using innovative sales strategies,” explains Kim.
For example, to benefit from incentives offered by Nepal, HMIL recently collaborated with a distributor in Nepal to establish a local passenger vehicle assembly line, agreeing to provide materials and parts for the assembly of the Venue passenger vehicle model.
HMIL intends to further increase its customer base by tapping into new markets in India, such as rural, Tier-2, and Tier-3 towns, to meet customer demands. “We intend to continue deepening our dealer network across India. With the expanding road infrastructure in India, we have been growing our presence in rural areas by engaging with our existing dealers to expand their operations, as well as onboarding new dealers,” avers Garg.
HMIL is also taking steps to enhance allied businesses, such as pre-owned passenger vehicle sales, conducting benchmarking studies, and sharing best practices with dealers to boost efficiency and provide more business opportunities for them. Furthermore, HMIL intends to focus on sustainability at dealer showrooms. For example, it now encourages some dealers to install solar power panels at their showrooms and service centres and offers the option of dry washing for customers to clean their vehicles.
Regarding financials for FY24, HMIL had revenue from operations of around Rs70,000 crore. Its EBITDA margin was 13 per cent, with consistent growth reflected in a 13 per cent CAGR growth in sales volume from FY22 to FY24 and a 21 per cent CAGR growth in revenues during the same period. It posted a 7 per cent CAGR growth in ASP from FY22 to FY24.
“HMIL’s financial discipline results in efficiency and cost leadership. HMIL has one of the best-in-class margins and an industry-leading RoCE profile,” says Wangdo Hur, Whole-Time Director and CFO of HMIL, adding, “HMIL is a unique combination of profitable growth, scale, capital efficiency, and returns.”
Listing and valuation
HMIL has been performing well in India for more than 26 years and is the second-largest passenger vehicle OEM in India. Kim asserts: “We believe that now is the ‘right time’ for us to take a step forward to further Indianise our operations and become a ‘home brand, most trusted brand’ in India. The IPO will ensure that HMIL is even more committed to success in India as we continue to pursue global standards and practices in terms of governance.” Additionally, the IPO will provide
an opportunity for local and global investors to participate in HMIL’s growth story.
IPO market and financial analysts point out that the premium valuation commanded by HMIL relates to the Indian auto sector, which is attractive, sizeable, and high growth. The industry is expected to grow between 4.5 and 6.5 per cent from FY24 to FY29 (CAGR), reaching 5.2 to 5.7 million in domestic sales volumes (as per CRISIL).
HMIL has a strong global parentage in HMG and HMC, with HMIL being among the top three contributors to HMC’s PV sales volumes. HMIL has access to R&D, technology, platform, brand, and support across operations from HMC.
HMIL has consistently been the second-largest auto OEM in India since FY09 (by domestic sales volumes). It has been the largest auto OEM in the Indian mid-size SUV segment since FY19 and the largest exporter of passenger vehicles from FY05 to 11MFY24. HMIL has a diverse, premium product portfolio across powertrains, commanding higher average selling prices (ASP). It has a portfolio of 13 models across major PV segments, powertrains, and body types. There is a clear game plan for EVs with the near-term introduction of the Creta EV (in terms of readiness versus Maruti).
HMIL has the ability to promptly identify emerging trends and introduce innovative vehicles backed by advanced technology. It has a strong track record of innovations (eg, Santro, Bluelink, Smartsense, Click-to-Buy, etc.).
The “Hyundai” brand is trusted and has received the highest number of Indian Car of the Year awards among Indian OEMs to date. It was the 32nd most valuable brand globally in 2023, up three places from 2022. HMIL has flexible and automated manufacturing capabilities with a focus on localisation. The Chennai plant has an annual production capacity of 824,000 (as of FY2024) and is optimised to manufacture one PV every 30 seconds. It has a localised supply chain, with the majority of parts and materials sourced from suppliers based in India.
HMIL has a track record of stellar profitable growth driven by premiumisation and an aggressive SUV strategy, coupled with an excellent growth outlook given the ramping up of the new plant and the incorporation of EVs and hybrids. It boasts a best-in-class operating margin profile (potentially higher margins on an ex-after sales basis) and a track record of disciplined capital allocation, resulting in superior ROCE.
Timing played a crucial role in Hyundai’s success story in India. By the time the South Korean automaker entered the Indian market, it had developed strong in-house capabilities. It had already experienced both success and near failure in the highly competitive North American market.
The liberalisation of the Indian car market presented a golden opportunity for Hyundai. As several Indian business groups expressed interest in partnerships, Hyundai executives conducted multiple trips and surveys, engaging in thorough discussions with potential collaborators. However, once they realised that they could enter the market with a wholly owned subsidiary, they decided to proceed independently. Their commitment to the Indian market was total, with both the ownership and dedication being 100 per cent.
HMIL was officially registered on 6 May, 1996. Following the model of its massive factory in Ulsan, South Korea, Hyundai knew their Indian plant needed to be located near a major port. Sriperumbudur, near Chennai, was chosen as the site for the plant, and the groundbreaking ceremony took place on 10 December, 1996. Soon after, Hyundai began transferring equipment and facilities from its recently closed Canadian plant to India, including paint and press shops.
By early 1997, Hyundai hired BVR Subbu as director of marketing and sales, an experienced executive who had made a name for himself at TELCO and was once regarded as Ratan Tata’s protégé. Subbu became a key figure in Hyundai’s Indian success. Initially, the plan was to introduce the Hyundai Accent, a mid-sized sedan, following the approach of other carmakers like Daewoo, who had entered the Indian market with higher-end models before introducing smaller, localised cars.
However, Subbu disagreed with this strategy. He believed the small car segment was where Hyundai should focus its efforts, as this was the heart of the Indian market. His vision was to launch a ‘people’s car’ and directly target the segment dominated by models like the Maruti 800 and Zen, which accounted for about 75 per cent of car sales in India.
Hyundai had recently launched its first small city car, the Atos, in 1997, and Subbu saw this as the perfect candidate for India. Fortunately, Hyundai’s senior management agreed with his assessment.
Redesigning Atos
There was just one significant problem – the Atos was visually unappealing. When the car was shown to potential customers in India, while they appreciated its spaciousness and comfort, they overwhelmingly disliked its appearance. Inspired by the popular ‘tall boy’ design of the Suzuki WagonR, the Atos had a rather awkward and upright design, which maximised interior space but gave the car an unstable, top-heavy look.
Subbu was certain that, in its current form, the car wouldn’t sell, and Hyundai’s management soon came to the same conclusion. However, Hyundai couldn’t afford to completely redesign the Atos for the Indian market. The compromise was to modify the rear portion of the car to improve its aesthetic appeal. This required new dies and tooling for the tailgate, rear roof, fenders, bumper, and lamp assemblies. Despite the additional cost for a recently launched product, Hyundai understood the importance of making these changes to better suit the Indian market.
At the 1998 Auto Expo, Hyundai unveiled its new small car on 13 January, naming it the Santro instead of the Atos. While the Atos had been rebranded the Atoz for the UK market, where the name resonated better, Hyundai decided the Indian version needed a unique name to reflect its improved design and appeal.
Hyundai was eager to launch quickly, recognising the advantage of being a first mover in the market. The pilot production of the Santro began on 27 May, 1998, just 17 months after the plant’s groundbreaking ceremony, and only four months after showcasing the car in Delhi. By 23 September, 1998, Santro models had arrived in showrooms across India, beating competitors from the Auto Expo to the market.
Priced between the Maruti 800 and the Maruti Zen, the Santro didn’t immediately ignite sales. It lacked the stylish elegance of the Tata Indica or the endearing charm of the Daewoo Matiz, but it was undeniably practical. The Santro offered a spacious interior, comparable to the much larger Fiat Uno. Its 999cc four-cylinder engine provided smooth power delivery, with a refined, quiet engine note, and better low-end drivability than the Maruti Zen. While the car tended to roll in corners, it held the road well enough and delivered a comfortable ride. The air-conditioning was highly effective, and the top-end model came equipped with features like power steering, front electric windows, an audio system, rear wiper, and fog lamps – adding to its appeal as a well-rounded, functional car for everyday users.
Though it wasn’t love at first sight, the Santro’s practical pricing – significantly lower than the Zen – made it a sensible choice. This is where Hyundai’s marketing strategy played a critical role. In a groundbreaking move for the Indian auto industry, Hyundai enlisted the advertising agency Saatchi & Saatchi to develop a campaign that would break through the scepticism. Their solution was to introduce a brand ambassador for the Santro, and they chose none other than rising Bollywood superstar Shahrukh Khan.
Starting in April 1998, well before the car’s launch, a series of television commercials began addressing the doubts surrounding Hyundai, the Santro, and the company’s commitment to India. The campaign featured Shahrukh Khan being pursued by a Hyundai executive, Kim, trying to convince the actor to endorse the product. The first commercial subtly introduced Hyundai’s commitment to excellence, Kim asserting: “We settle only for the best”. The following teaser ads had Kim explaining to Shahrukh Khan that Hyundai was serious about India, highlighting its network of dealers, suppliers, and workers, and emphasising the Santro’s quality and brand promise.
This innovative marketing approach helped Hyundai overcome initial scepticism and paved the way for the Santro’s success in India. In the second phase of Hyundai’s advertising campaign, running from July to September 1998, Shahrukh Khan posed questions typical of an Indian consumer: Who or what is Hyundai? Can the Santro handle Indian roads? Will Hyundai meet customer expectations and provide reliable after-sales service? By the end of the campaign, Khan confidently declared, “I am convinced”, effectively persuading many Indian consumers that the Hyundai Santro was the ‘complete family car’ they were searching for – offering more space and features than the popular Maruti 800.
This high-profile celebrity endorsement, combined with innovative media strategies and aggressive press coverage, generated significant hype for the Santro. Despite initial scepticisms, the car’s sales took off.
Priced competitively at Rs289,000 – significantly lower than the Maruti Zen’s Rs345,000 – customers flocked to showrooms when the Santro went on sale on 23 September, 1998. Unlike the traditional booking system, buyers could get the Santro with full payment, further enhancing its appeal.
By 1998, the company had invested Rs2,300 crore, making it the largest single investment by an automaker in India at that time. Importantly, Hyundai’s plant was not just an assembly line for knocked-down kits but a fully integrated manufacturing facility. The Santro was built from the ground up, unlike competitors like Daewoo with its Matiz or Maruti, which mostly assembled imported parts in their initial stages.
However, it was the Shahrukh Khan campaign that truly drove the brand’s success. By August 1999, Hyundai had sold 42,283 cars, and by the end of the financial year on 31 March, 1999, Hyundai Motor India had become the second-largest car manufacturer in India, trailing only Maruti Udyog.
On 27 April, 2000, the 100,000th Hyundai car rolled off the assembly line in Chennai, followed by the 100,000th Santro on 12 June of the same year. Shortly after, the first major export shipment of 760 Santros and Accents left India, marking Hyundai’s first serious venture into international markets (following a small test export of 19 Santros to Nepal in 1999).
Hyundai’s Chennai plant was both for India (its largest market) and for global exports. The Santro Xing became Hyundai’s global small car, and export volumes grew rapidly. The car was sold under various names: the Atos Prime in Europe, the Amica in the UK, the Dodge Atos in Mexico, the Inokom Atos in Malaysia, and the Kia Visto in Indonesia and South Korea. On 12 August, 2003, the first batch of 1,500 Santro Xings was shipped to Europe.
Hyundai’s success with the Santro, despite its initially unappealing styling, can be largely attributed to several key factors: its intrinsic reliability, practicality, and great value for money. Hyundai had also set itself up for success with a strong localisation strategy and impressive production volumes, driven partly by exports. The quality of after-sales service improved significantly as Hyundai expanded its dealership network, growing from 187 dealers in 2006 to 320 by 2010. But beyond these fundamentals, it was the marketing, expertly handled by BVR Subbu and his team, that played a vital role in the Santro’s rise to prominence.
The Santro’s continued relevance, even as newer models like the i10 and Eon entered the market, is a testament to Hyundai’s resilience and ability to adapt. Hyundai’s story is particularly remarkable when considering the company’s struggles in the US during the late 1990s.
Today, both the Santro and the i10 have achieved ‘millionaire’ status, with Hyundai cementing itself as a major player in the automotive industry. Hyundai’s true transformation came with the introduction of their new design approach, known as the Fluidic Design Philosophy. Coinciding with Hyundai’s rapid global growth, this design shift helped reposition the brand from a relatively unknown South Korean company to a major player in the global automotive industry. The Verna Fluidic, launched in 2011, marked the beginning of a new generation of cars built around this design philosophy.
Models like the Hyundai Verna and the i20 continue to thrive in the Indian automobile market. The i20 was the best-selling car in its segment for many years until the launch of the Maruti Suzuki Baleno.
Initially a competitor to the Swift, the i20 has evolved over time, solidifying its status as one of the most iconic premium hatchbacks ever sold in India. Meanwhile, the Verna, introduced as a replacement for the Accent, has become one of the country’s most popular sedans.
The real success story in recent times has been the Creta, which has been dominating its segment, as SUVs have taken over the Indian marketplace.
Gautam Sen