The country’s second largest passenger car manufacturer Hyundai Motor India expects to be one of the biggest winners of the goods and services tax (GST) regime, as it has products in each category whose prices have come down. The company said it had already started giving discounts from June and will reduce prices even more after GST implementation from July 1. Overall, the company said it was passing on GST benefits to customers by 3-4 per cent across models. In an interview with BusinessLine, Rakesh Srivastava, Director, Sales and Marketing, Hyundai Motor India, spoke about the company’s growth plans. Excerpts:

Your sales declined more than 5 per cent year-on-year in June. Was this because of changes made due to GST implementation?

We are not comparing June to June numbers, but from what we sold in May. We have been one of the biggest gainers during the last month, as our market share grew to 19 per cent compared to 16.7 per cent in May. We have gained largely because we took proactive steps. We offered customers an opportunity to own a Hyundai car at the best price value by giving them year-end discounts (which actually happen during December) in June itself. We gave them GST price in June itself. As a result of these two strong initiatives, we did not lose volumes like other manufacturers and our market share actually climbed to 19 per cent. We did much better than the industry in terms of wholesale and reducing the inventory level.

What will happen to prices after GST implementation?

In the post-GST implementation period, we believe there will be a unified seamless market with challenges of border stoppages of goods disappearing. We believe that logistics issues will be addressed, as goods movement will be faster and the costs, therefore, will come down. In addition, tax on tax has been withdrawn now. So, the prices are coming down, which means affordability will now be better for customers, especially for companies like ours that have products ranging from ₹3-30 lakh. I believe Hyundai will be one of the biggest gainers, because we have one of the widest product range.

So, do you mean that there will be more discounts?

Yes. We are going to pass every single paisa of tax reduction that is going to happen to customers. We are a customer-centric company and would like to be ethical in terms of passing every benefit.

How do you see the industry’s growth after GST implementation?

With affordability becoming better, I believe the auto industry will move into a strong positive growth trajectory of almost around 14-15 per cent, which is good. We have our own business plans and we will do better than the industry.

In terms of transport, the government is looking at using waterways for transport of goods. Is Hyundai ready for such a means of transporting products to different States?

Hyundai was the first one to bring products, such as cars, from the Chennai port to Gujarat port.

We brought these using ships. So, yes, we are taking the rail route and roadways and have also taken the waterways.

We are always open to participation in something that’s going to give better ownership and experience to customers, including logistics, so that the cars reach the right direction in the fastest time.

What is your strategy in the next few years, since competition is rising with companies such as SAIC and Kia entering the market?

India will be the third largest automobile market in the world by 2020. For us, the Indian market is large and has space for everyone.

Having said that, everyone has to fight for that space by way of good products, services and strategy, which is not easy. It requires a strong understanding of the Indian market.

Indian customers are very discerning and demanding — they are globally connected through the digital world — and have global aspirations on ownership.

An Indian customer today is no different from a global customer. In view of this, we believe we have to give our customers the best of products and services.

Companies that bring in the latest technology, modern and premium experiences, will win. And, for that, you need a different mindset – of a leader that brings new, unique and a first-mover experience. Our products like Grand i10, Elite i20 and Creta have been winning awards and selling 10,000 units each every month. That defines acceptance of Hyundai products.

What about your expansion plans?

We are looking forward to creating more opportunities for our dealerships by creating more platforms, such as online, giving them more products, and also refurbishing our current product line-up.

We are also looking forward to giving more opportunities for network expansion by going into unrepresentative areas, that we call distribution dealer unit.

So, we are looking at strengthening our current channel partner first. Expansion is the second part.

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