Hyundai CEO reveals future plans for India

Tuesday 30 July 2013, 11:52 AM by

It would be safe to say that Hyundai's journey in the Indian car market has been a fruitful till now. The South Korean firm made its way into the country during 1990s and has gone on to become the largest car exporter in India. One of its biggest achievements has been the challenge it has posed to the dominance of Maruti Suzuki. The entry of Hyundai has impacted the dynamics of the small car market in India. Bo Shin Seo, the Managing Director and Chief Executive Officer of Hyundai Motor India Limited, praised the Indian car market and its role in the company's success over the years.

Hyundai CEO reveals future plans for India | CarTrade.com
Hyundai CEO reveals future plans for India

Describing the company's run in India as a strong one, Bo Shin Seo talked about the wide network of dealerships across the country. Hyundai's story of success began in 1998 with the launch of Santro, which is quite popular till now. Following Santro's introduction, Hyundai capitalised on the likes of Eon, i10, i20, Accent, Verna, Sonata, Santa Fe and Elantra in the Indian car market. Elaborating the firm's future plans, Seo said that the company is expected to launch new vehicles for the next five years. Currently, Hyundai has a market share of 20.3 per cent and the auto maker is rigorously working towards increasing the same.

India, as a car market, has played a huge role in Hyundai's success till now and is an integral part of its future plans as well. Industry experts predict a prosperous period for the Indian market in the coming years, owing to the increase in the population of young people who can be potential car buyers. Hyundai plans to make optimum utilisation of this opportunity to boost its growth rate, along with ensuring customer satisfaction. Emphasising on this importance of India, Bo Shin Seo said, “India is at the core of Hyundai Motor Company’s overall business plan and is an extremely important market for the parent company.”

Needless to say, the policies of Indian government are critical to the success of any auto maker and Hyundai is no different. According to Seo, the government has always aimed at creating a platform for the automobile industry to grow at a steady pace. He appreciated the government for its support in helping the firm to set up a manufacturing facility in a period of 17 months. Irrespective of the current scenario, Hyundai feels that the future of the India auto sector is filled with growth potential. Measures related to infrastructure improvement, better connectivity to ports and lowering interest rates could surely help in overcoming current obstacles. As far as expansion plans are concerned, Hyundai will look to create a number of direct and indirect employment opportunities by establishing a flexible engine plant and a new press shop.

Although the company's primary focus remains is on the domestic market, it is still the country's largest car exporter. The South Korean auto maker is pretty confident about maintaining the status without compromising on domestic operations. Like all other car makers, Hyundai has also faced problems due to the devaluation in the value of rupee, which has led to increase in input costs and fuel prices. As a consequence of the fall, the demand is consistently declining and profit margins are squeezing further. Hyundai, however, has the able assistance of exports in order to counter the slowdown by getting good realisations.

As per company statistics, the auto maker has invested around $2 billion in its two state-of-the-art passenger car manufacturing units. Apart from this, an additional investment of $300 million is to be made in setting up of a flexible engine plant, which will be located in the Sriperumbudur factory premises. Also, Hyundai expects to start operations at the new facility in the second half of 2013. The main aim behind the establishment of this plant is the speeding up of services for the domestic customers.

Speaking on the Indian workforce, Seo said workers here are immensely talented, committed, disciplined and well educated. Employees are aware of latest technological trends and structures that are practised around the world, putting them at par with their global counterparts. In terms of the pay structure, Hyundai workers are among the best paid in industry. Reports state the Hyundai is one of the best companies when it comes to taking measures for employee welfare. The firm holds meeting with the union every three years to discuss and address the situation. Hyundai also remains in constant dialogue with its workers to take care of their needs and solve their problems.

Speaking on the same, Seo said, “We also have the “My Voice Box” policy wherein employees can directly get in touch with the management and expect redressal within seven working days. My Voice Box is an employee feedback forum that helps in understanding employees’ concerns, grievances and suggestions. The confidentiality of the process has made it extremely successful. Boxes are placed on all shop floors, work areas and other areas frequented by employees along with a hard copy of the forms.” On being asked about the level of royalty that goes to the parent company from the Indian subsidiary, Seo replied, “We do not divulge standalone financials, but as a company, we contributed approximately 25 per cent to our parent’s global sales.”

Competition is a key aspect that needs attention and development of strategies for a company to grow in the market. With new companies entering the country and the established ones gunning for growth, Hyundai believes that it can rely on the brand value to maintain a stronghold.

Commenting on the same, Bo Shin Seo further added, “HMIL’s focus will continue to be on the domestic market and to maintain our dominant position. We will periodically introduce new products that will meet the requirements of our customers and provide them with the very best of technology and design.” He further added, “In India, our sales numbers are growing every year. In passenger cars, our market share is 20.3 per cent but in passenger vehicles it is 15.3 per cent. The high level of localisation, our dealership network, logistical advantages in having vendors situated around the plant, coupled with valued engineering, has helped us grow in India. The quality, customer satisfaction and investment in the brand are the main focus areas for us.”