Hyundai India Says Small Cars Not Forgotten Amid SUV Overdrive

Hyundai Motor India Ltd. will always be where the customer is, its chief operating officer said on Tuesday, dismissing concerns that the "SUV-fication" of the world's third largest automotive industry will lead to the slow death of small cars.

"The kind of market is, we will always have sedans, hatchbacks, SUVs, etc. We'll always have enough space for all," Hyundai India COO Tarun Garg told reporters after the listing of India's second largest carmaker. "Customers are making purchasing decisions based on design, technology and safety and not really body type."

Garg's outlook on SUV-fication comes amid an outsized demand for oversized cars in India, which was a small car market not too long ago. Share of SUVs across price points crossed the 50% mark for the first time in the last financial year, almost doubling in less than five years. Small cars—or hatchbacks—now account for only a fourth of the market.

Hyundai India has been a beneficiary of the SUV overdrive itself. Today, large cars account for nearly 70% of the company's monthly sales, thanks to the success of the Creta, which essentially created the 4.3-metre SUV segment in India.

Still, Garg said that this is not the death knell for small cars in India. After all, more than a million hatchbacks—about 28% of overall volumes—were sold in India in the last fiscal.

Having multiple body types also allows Hyundai India to tailor its offerings as per demand. So, while the Aura, Nios Exter get petrol and CNG powertrains, the Creta and Alcazar get petrol and diesel engines. The Verna sedan gets naturally aspirated as well as turbo petrol powertrains.

Geographically too, a diversified product lineup works to Hyundai India's advantage. So, while Delhi is predominantly a petrol market, buyers in Telangana and Punjab prefer diesel cars. Maharashtra and Uttar Pradesh are big on CNG powertrains.

"At Hyundai, we are technology agnostic. We believe in offering all kinds of solutions to the customer," Garg said. "Having all kinds of powertrains allows us to target the entire India."