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Automobiles

Hyundai, Kia outrival Japanese carmakers in India, other emerging markets

Hyundai is set to launch the much-awaited Alcazar SUV in India to strengthen market leadership

By Jun 17, 2021 (Gmt+09:00)

Hyundai Motor's Creta SUV
Hyundai Motor's Creta SUV

India, one of the world’s fastest-growing auto markets, has for decades been dominated by Japan’s Suzuki Motor Corp., which runs Maruti Suzuki India Ltd., its joint venture with Indian carmaker Maruti.

For 40 years, the Japanese automaker has reigned the market as the undisputed champion with its name tag on almost every passenger car sold there.

Now its market share in Asia’s third-largest economy is well under 50%, yielding its market leadership to South Korea’s Hyundai Motor Group, which last month claimed the top post for the first time in 23 years.

According to the Society of Indian Automobile Manufacturers (SIAM), the Korean automotive group’s two car-making units – Hyundai Motor Co. and Kia Corp. – sold a combined 36,501 units in India in May, accounting for 35% of the country’s total auto sales, up from a share of 23% in April.

That marks the group’s highest market share since Hyundai Motor built a car factory in India in 1998.

Maruti Suzuki came in second with the sale of 32,903 cars in May, accounting for 32% of the market, down from the previous month’s 47%.

May’s car sales figures were significantly lower for most automakers operating in India compared to earlier months as they were forced to shut local factories amid the second wave of the COVID-19 pandemic.

Maruti Suzuki halted all its plants on May 1-16, also partly affected by maintenance. Hyundai and Kia nearly idled their Indian operations May 10-15 for the summer holiday. Hyundai Motor also suspended its Indian plant between May 25-30.

Hyundai Motor's Venue SUV
Hyundai Motor's Venue SUV

HYUNDAI’S ROBUST SUV LINEUP

Industry watchers said the rank reversal was caused by the longer period of disruptions at Maruti Suzuki’s plants as well as Hyundai Motor Group’s robust lineup of sport utility vehicles (SUVs), which are growing popular in the Asian country.

While Suzuki has focused on sedans in India, Hyundai Motor and Kia have steadily strengthened their SUV lineups to attract Indian drivers who favor tall vehicle bodies due to the often subpar road conditions.

In 2020, Hyundai and Kia emerged as preferred SUV brands in India with one in every two SUVs sold made by the Korean duo.

Of all SUVs sold in India, Hyundai took up the lion’s share of 25.5% in 2020. Kia came in second with 19.1% of the SUV market. Combined, the two Korean automakers accounted for 44.6% of India’s recreational vehicle market.

Hyundai Motor’s mid-size SUV Creta was the top-selling SUV and the seventh-highest seller among all vehicles in India last year with 96,989 units.

In the first five months of this year, Hyundai's Creta sold 57,342 units, nearly 60% of its 2020 sales.

According to local dealers, Hyundai’s hatchback i20, the Accent and Sonata sedans, and the small-size Venue SUV are also gaining popularity in India.

Kia, which entered the Indian market in August 2019, is selling premium SUVs, including the Seltos and the compact Sonet, in the Asian country.

“With improving living conditions, Indian people are increasingly purchasing more expensive SUVs,” said an industry official.

Kia's Seltos SUV
Kia's Seltos SUV

VIETNAM, OTHER EMERGING MARKETS

The Korean automakers are also gaining ground in other emerging markets, where their Japanese rivals have been the dominant players for years.

In Vietnam, Hyundai Motor and Kia overtook Toyota Motor Corp. in 2019.

The Korean companies sold a combined 37,354 units in Vietnam in the first four months of this year, compared with Toyota’s 18,973 cars.

Local dealers said Hyundai’s subcompact Accent sedan is more popular than the Toyota Vios in the Vietnamese market as the Korean car offers more diverse options at similar prices.

In Russia, the Korean duo sold 161,409 units in the January-May period, four times more than Toyota’s sales.

Hyundai and Kia also outsold Toyota in Brazil with 80,419 cars versus the Japanese carmaker’s 62,094 units during the five months.

In the Indian market, Suzuki finds itself caught between the Korean automakers winning over consumers seeking high-end models and local players pushing sales of budget vehicles, according to a recent Nikkei report.

With its declining profitability, the Japanese automaker no longer can operate as efficiently in India as it once did, it said.

Hyundai Motor is set to launch the Alcazar SUV in India on June 18.
Hyundai Motor is set to launch the Alcazar SUV in India on June 18.

ALCAZAR LAUNCH

To further strengthen its SUV lineup in India, Hyundai Motor plans to launch its new six- to seven-seater SUV, the Alcazar, in the country on June 18.

The Hyundai Alcazar will rival the likes of the Tata Safari, MG Hector Plus and Mahindra XUV500.

Analysts said India will emerge as one of Hyundai Motor Group’s core markets given the country’s low automobile penetration rates despite its huge population of 1.4 billion people.

Last year, Hyundai Motor and Kia sold a combined 564,147 cars in India, accounting for a mere 8.9% of the duo’s global sales of 6.35 million units.

“Hyundai Motor Group’s strong sales in India could make up for the group’s sluggish sales in China. Still, the competition among global players in the Indian market is heating up. The Korean automakers could face an uphill battle,” said an industry analyst.

Write to Hyung-kyu Kim at khk@hankyung.com

In-Soo Nam edited this article.

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