Chennai plant operating at near-full capacity to meet growing demand

The country’s second-largest carmaker, Hyundai Motor India, is betting big on its two new models, Grand i10 and the Xcent compact sedan. The company says it has received a significant number of bookings and inquiries for the two models.

The new compact sedan, which was launched on March 12, has 16,000 bookings and about 150,000 inquiries, Rakesh Srivastava, Senior Vice-President, Sales and Marketing, told Business Line.

“We have sold 6,300 units of Xcent in April with a ratio of 60:40 (petrol and diesel). There is a waiting period of around two months. We are producing 7,000 units of the model per month,” he said.

However, according to analysts, the challenge for the company will be in maintaining consistency, as whenever a new launch happens, sales of the product always go up for the first few months.

As demand is high, Hyundai’s plants near Chennai are operating at nearly full capacity. It now has a total annual manufacturing capacity of 670,000 units, against 640,000 last year.

Amaze, Dzire sales decline

The company is also taking advantage of its competitors’ sales decline in the same segment. These include Maruti Suzuki India and Honda Car India, which have seen demand for the Dzire and Amaze, respectively, decline.

While Dzire’s sales fell to 16,008 units in April from 18,353 units in February, Honda Amaze’s sales fell from 6,030 units in February to 3,355 units in April.

The fact that these cars are in one of the segments with the highest sales (compact, 5-seater and length 3600-4000mm), going by Society of Indian Automobile Manufacturers (SIAM) numbers, is a worry for Maruti and Honda.

SIAM numbers show that the industry sold 76,907 units in this segment in March, around 7 per cent more than in the corresponding month last year.

Grand show

According to Srivastava, Hyundai is selling around 10,300 units of the Grand i10 per month on an average and has sold around 82,400 units of the model since its launch in September 2013.

Srivastava also said models such as Xcent are being accepted by customers, especially the youth, because of better boot space, a rear AC vent, push-button start/stop and other features.

These successful launches have also resulted in the company getting traction from rural markets, Srivastava said, adding that the rural market share is around 19 per cent, and can go up to 20 per cent this year.

Overall, Hyundai has a 20.7 per cent market share, and this year, it expects better growth as volumes grow, he added.

In all, the company sold 35,248 units in April, an 8.8 per cent increase over the same month last year.

(This article was published on May 8, 2014)
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