The country’s second largest car maker Hyundai is scrambling to fill gaps in its portfolio of cars. It is expected to launch next year a compact SUV and also a multi-utility vehicle in 2015.

The cars are being designed at its centre in Namyang, Korea, and are expected to share the same platform, which will bring down costs and give economies of scale.

Car platforms tend to be the biggest cost in the development of a car and include the under-body and suspension. It also includes the chassis of the car, engines and powertrain options. The designs are supported by the centre based in Hyderabad, which will provide inputs on Indian customer preferences.

This SUV will take on Renault’s hot-selling compact SUV, the Duster, as well as Ford’s impending launch of the EcoSport.

The engine capacity for its compact SUV has not yet been decided but Hyundai has a range of engine options in diesel and petrol ranging from 1.4 litre petrol to 1.6 litre diesel to choose from. In 2015, it will launch a six-seater multi-utility vehicle, a new segment of the car market now dominated by Maruti’s Ertiga. Hyundai has an upper-end SUV offering in the Santa Fe, but none in its portfolio to match a Duster.

B.S. Seo, Managing Director, Hyundai India, told Business Line that the car maker enjoys a market share of 19.8 per cent. “For the time being, the market is down; long term I expect the market to be good. We are looking to improve our market share with a strong product line-up. Our compact SUV next year will help our market share.”

Later this year, Hyundai plans to launch a new diesel compact car (code named BA), which, it says, will create a complete new segment and will be positioned between the i10 and i20. “We believe in providing new values and experiences combining performance with reasonable price and elegance. We plan to launch this car in the second half of 2013,” says Seo.

This car is expected to take on Maruti’s Swift, and may feature a 1.1-litre diesel engine produced at its new engine plant in Chennai.

Diesel engine plant

Hyundai has been hampered without a diesel engine plant but the company is setting up a $300-million flexible engine plant at its Sriperumbudur unit, which can produce both petrol and diesel engines. This is the first time that the company will offer a diesel engine option in a segment lower than the i20. The new engine plant has a capacity of three lakh engines a year.

The new car will benefit from the lower cost of diesel engines manufactured at its new facility. So far, for all its diesel engine variants, Hyundai has been importing diesel engines from Korea.

Seo points out that its new diesel engine plant can switch in real time between petrol and diesel engines, depending on which category demand is spiking.

“There is fluctuation in diesel prices, but demand (for diesel vehicles) is strong and we can cater to customer demand better now.”

Referring to the tough market conditions, Seo says, “Even though the market is tough, we will try to prepare a good line-up for customers”.

Domestic passenger car sales declined by 22.51 per cent in March this year compared to the same period last year.

Hyundai saw a drop of 14 per cent in sales in the March 2013 over the comparable period last year.