Kona hits the bull’s eye in Hyundai’s new mobility avatar

Murali Gopalan | Updated on: Aug 02, 2019

Market response shows that the strategy is working like a charm

SS Kim pauses for a brief while before responding. “Yes and no is my answer,” says the President and MD of Hyundai Motor India.

The question pertains to the challenges of car ownership in India thanks to the growing reality of crowded cities and a reluctance by the customer to buy a vehicle. Kim then puts his reply in perspective.

“It is my personal/individual view that owning a new car in India is a symbol of a person’s social position. It is also a message of being successful in his/her business or social life,” he says. To that extent, there is no immediate threat to ownership yet and “for the time being” people will want to possess their own cars.

Kim then adds a caveat saying this part of the reply constitutes a 75 per cent pillar. The remaining 25 per cent pillar “might be in the extremely congested metropolitan areas” where youngsters would prefer mobility without the pressure of ownership.

The ‘yes and no’ response from the Hyundai India chief therefore makes a lot of sense. He believes that as an OEM, it is the company’s responsibility to look at this 25 per cent category, listen to them and develop more products/services and solutions.

“This is a challenge but also an opportunity,” says Kim. From his point of view, Hyundai has moved beyond becoming a car company to a mobility solutions provider. It is here that shared mobility, connected mobility and clean mobility will be part of a new mantra for India, focussing on customer experience, lifestyle and so on.

Things certainly seem to be on track for the Korean car brand, going by the present market response to its Kona electric SUV, which was launched three weeks ago. It has been earmarked for 11 cities and the number of bookings has already touched 152.

Exceeding expectations

Within Hyundai, the response has exceeded all expectations and is a clear indication that Kona has struck the right chord with its potential customer base. The southern region leads the pack with 106 bookings where Bengaluru is comfortably ahead with 42, followed by Hyderabad (26), Chennai (24) and Kochi (14).

Elsewhere, Mumbai leads with 21 with Delhi quite someway behind at just nine. Pune, Gurugram, Chandigarh, Kolkata and Lucknow make up the balance 16 bookings even while it is likely that the final number could just cross the 200 mark. Given this encouraging response, Hyundai may even consider extending the Kona’s presence beyond these 11 cities to a larger pan-India presence though this will take time.

Kim also has reasons to be pleased given that the Centre is pulling out all the stops to encourage e-mobility both in terms of fiscal sops to manufacturers as well as through tax incentives to customers. With the recent reduction in GST, the Kona will also end up being less expensive by nearly 10 per cent at ₹23-odd lakh.

“As an OEM, we are doing our best for India with new solutions for emissions while globally the electrification trend is a major one in many countries,” says Kim. Yet, the fact remains that India’s automotive ecosystem has suppliers and dealers who need to be prepared for this challenge as it is a different ballgame.

The Hyundai India boss believes that the Centre must take into account these realities while preparing its roadmap for e-mobility. “It is the right direction but will take time for sure,” he says while driving home the point that the internal combustion engine (ICE) will continue for the time being, especially when it is up to the task in meeting the emissions challenge with Bharat Stage VI literally around the corner.

Not sure

“As for 100 per cent electrification, I am not sure if it is possible,” admits Kim, given that there is room for other clean fuel options. For instance, electric and hydrogen technology “can also be considered” for coexistence with the ICE as part of a robust energy management system.

In the automotive industry of the future, it is his firm belief that there will be coexistence globally of electric, fuel cells, ICE and so on. “Even in the case of diesel, if BS VI norms can be met by OEMs, it is a meaningful solution with less CO2 and less emissions. So why not?” asks Kim.

Getting back to the subject of Kona, he says it marks an important chapter for Hyundai in India. While there have been some “interesting EV offerings” already in this market, it is his hope that Kona might be a gamechanger because it removes the anxiety of range. “Kona will relieve you of stress and is perfect for those who want to be early adopters,” reiterates Kim.

The response thus far seems to vindicate his stand and a detailed survey of customers might just reveal that quite a few of them are these early adopters who are keen on trying out something new. They are the ones who eventually spread the word and prompt others to join the bandwagon. For now, it looks as if Kona is on a good wicket and will only strengthen brand Hyundai in the process.

The SUV’s 450-kilometre range will also prompt customers to contemplate long travel between cities as in the case of Delhi-Agra, Chennai-Bengaluru or Mumbai-Pune. Kim is reasonably confident that Kona will also contribute quite significantly to a change in customers’ minds and make them more knowledgeable about EVs and electrification.

New perspectives

“We believe that interest will grow and there will be a new perspective on EVs,” he says. Hyundai will also look at mass production of more affordable electric vehicles in the future where it will set up a totally new ecosystem for manufacturing with suppliers, etc.

Kim says the company is on the lookout for candidates and partners in this drive though this is still sometime away. After all, this is a brand new foray, which will involve high technology that should then be made suited to Indian roads. “We will come up with a nice, strong local ecosystem in place,” he says.

Hyundai is clearly gearing up for the new mobility era next decade, which will have its own share of disruptions worldwide. India has also made its intent clear in the clean air drive with the introduction of BS VI emission norms from April 2020. In the process, it is in sync with Europe and parts of ASEAN on clean air initiatives.

“Even for BS VI, we will continue with diesel as customers will want to enjoy this option,” says Kim.

Prominent manufactures like Maruti Suzuki plan to phase out diesel from their line-up in the BS VI regime largely because it will become a costlier option for customers. Diesel has also become pricier in recent times and there is no telling if tensions in West Asia could see a further spike in the future.

“Our R&D is focussing more on the Indian market and there is huge support from headquarters,” says Kim. The R&D centre in Hyderabad is also playing a bigger role and bringing a lot to the table. While India’s competence in IT is well known by now, there is a lot of work happening with the Hyderabad team on vehicle engineering too. For Hyundai, the new mobility script is falling nicely into place.

Published on August 02, 2019
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