India’s second-largest carmaker, Hyundai Motor, will launch a new small car it has codenamed BA, the fifth offering the segment in the country, during the festive season as it looks to shrug off declining sales.
Hyundai India’s sales have slid 7% in this calendar year so far. The company hopes that a turnaround in the second half would help it post a growth of 3% for the full year. It is pinning its hopes on BA, expected to have a 1.2-litre petrol and a 1.1-litre diesel engine, to help it achieve this target.
The car will compete directly with Maruti’s Swift, India’s second largest-selling car.
“This car will give fresh impetus to our strategy in India,” said Bo Shin Seo, MD and CEO, Hyundai India. “We expect to sell around 2 lakh units of this car annually. It will be our bestselling car here. It will also be exported like many of our other cars.”
The South Korean chaebol (business group) is the leading car exporter in India, and sends cars to 120 countries from India. Its small cars such as the Eon and i10 are made only in India. It is close to full capacity of around 700,000 units a year at its two factories, but is not looking at a third factory yet. The plan is to cut exports to create capacity for the domestic market.
“Our priority will be the domestic market. There is no lack of capacity,” Seo said. “Hyundai is opening up factories in other parts of the world... Brazil and Europe. Some of the cars will be made there and that will free up capacity in Chennai for India.”
Hyundai is planning more new cars such as a compact SUV, a multi-purpose vehicle and a sub 4-metre sedan to take on the likes of Honda Amaze and Maruti Dzire. It has however ruled out the diesel i10 variant, being exported from Chennai, in the domestic market.
“We have been a little late on a compact SUV,” Seo said. “But we are looking at that segment closely now. Not this year... but we will have a product soon.”