The Hindu Business Line : Hyundai not to enter 1-tonne carrier segment

Hyundai Motor India (HMI) has called off its plans to venture into the one-tonne carrier segment. According to Mr Arvind Saxena, Vice-President, Marketing and Sales, the company conducted a feasible study that concluded two months back, and the results do not favour HMI to venture into this segment as of now.

“The study concluded that the company was not able to offer a model at that respective pricing in order to be competitive in the market,” said Mr Saxena. The one-tonne carrier segment was primarily evaluated due to the success that ‘Tata Ace’ has achieved in this respective segment; HMI expected similar demand for their forthcoming product in the country as said earlier by senior officials of the company.

As of now, the Tata Ace is available in multiple applications at a starting price of Rs 2.45 lakh (ex-showroom, Mumbai). Achieving such a competitive pricing, calls for high levels of localisation.

Cost-competitive

According to sources, the vehicle is 100 per cent indigenised having an internally sourced engine (Tata Ace houses the same Indica engine but with two-cylinders only giving an adequate horsepower of 16 hp). Thus it makes the vehicle very cost-competitive and sets a bench mark for other competitors who are about to introduce their vehicles shortly.

For Hyundai to achieve such high levels of localisation would mean developing a completely new model with the prospects of developing each and every component internally or locally from the existing ancillary industry. Experts believe that since there was a clash of right product vis-À-vis wrong pricing and that would have led to a possible development of a new product altogether that perhaps did not make economic sense for the company.

Venturing into the one-tonne carrier segment was one way of entering into the light commercial vehicle market. This was part of the plan to expand the company’s presence in the country.

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