Hyundai small car launch by 2011 in India

Hyundai joins the mini-car race, to come out with its small car in India in about 2 years

South Korean car-maker Hyundai Motor says it is working on a new compact car that would be smaller than its popular car, the Santro.  We had reported on the Hyundai small car for India a while back.

The planned compact car, which will be India-specific, is being developed in Korea, Han Woo Park, chief executive officer and managing director of Hyundai Motor India Limited (HMIL), told reporters in Chennai.

Park did not disclose either the launch schedule or the pricing of the new car, but said the company is investing about Rs 800 crore in the development of the new product.

In his first interaction with reporters after he took as over as chief executive officer and managing director of Hyundai Motor India Limited, Han Woo Park said the development cost of the planned small car included its design, proto-type, and testing.

According to Park, it will take at least 24 months to launch Hyundai’s small car in India.

Hyundai will produce the new car at Sriperumbudur, near Chennai, in Tamil Nadu, for the domestic market. Later, the car it will also be exported, but Han Woo Park did not divulge the names of the countries to which the small car will be exported or when the exports will begin.

Hyundai is planning to raise the number of its dealers from 274 to 320 in 2010, according to Park.

The announcement by Hyundai Motor comes at a time when compact cars are being talked about the world over and also when the Nano car of Tata Motors is pushing carmakers, including such big name as Ford and Nissan, to make small cars.

Han Woo Park said the small car that Hyundai is planning to make – which would be something like a mini-Santro – is in line with the strategy of Hyundai Motor India Limited to enhance its share of revenue from the domestic market.

Hyundai’s domestic sales-to-export ratio is 50:50, and Park said the company is aiming at changing this ratio to 60:40 in 2010.

Hyundai Motor India Limited, Han Woo Park added, will keep on concentrating on the domestic market – both in terms of product introduction as well as sales. The company also will continue to be the hub for the small car, and it will export its compact cars made in India to all major markets abroad. .

On the question of mounting competition from other brands of small cars that would be flooding the market in 2010, Arvind Saxena, senior vice-president (marketing and sales) of Hyundai, said the company at present has a 21% share in the market. In future, when there comes competition, Hyundai will be “prepared to keep its market share,” Saxena told reporters.

When asked if the company intends to enhance its share in the sedan segment, Saxena replied that the car market in India is still dominated by the small-car segment.