Hyundai to take fight to Mahindra in SUV market

The move comes amid likely fierce competition in the bigger SUV segment, as Mahindra prepares to launch the latest version of the popular Scorpio and a new vehicle, the XUV 700.

After its runaway success with entry-level and mid-size sport utility vehicles, Hyundai is planning to shake up the bigger six- and seven-seater SUV market—the domain of Mahindra and Mahindra—with its latest product, the Alcazar.

Hyundai is confident that the Alcazar will replicate the 2015 success of the Creta and create a niche in the market.(File photo)

Despite being a leader in the overall SUV segment, Hyundai Motor Company is yet to taste success with its premium large SUVs such as the Santa Fe and Tucson. The latest offering, if successful, will help the South Korean company tap a new set of customers.

The move comes amid likely fierce competition in the bigger SUV segment, as Mahindra prepares to launch the latest version of the popular Scorpio and a new vehicle, the XUV 700. Mahindra’s new management led by Anish Shah has made it clear that it will only focus on ‘true blue’ SUVs rather than smaller ones to gain market share.

Hyundai is confident that the Alcazar will replicate the 2015 success of the Creta and create a niche in the market.

According to Tarun Garg, director, sales, marketing and service, Hyundai Motor India, customers are now aware that it is the No. 1 SUV maker in India and they like its designs and technology. Hyundai also plans to tap Creta customers and upgrade them to the Alcazar.

“Before launching a product, Hyundai always conducts market research and then tries to create a segment and this has been there since its first product Santro. With the Creta also in 2015, the company managed to create a separate segment. That’s why we are quite hopeful and confident. Today, the numbers may not look very high in the segment (bigger SUVs), but given the feedback we have received, we are confident of creating a market,” added Garg.

With the introduction of its smallest SUV, the Venue in 2019 and the second generation of mid-size SUV Creta in 2020, Hyundai managed to eclipse Maruti Suzuki India Ltd and Mahindra and Mahindra to become the leading manufacturer of such vehicles.

According to experts though, these are not proper SUVs and are mostly suitable for emerging markets like India where people want vehicles that look like an SUV rather than a proper SUV, which are far more expensive.

Besides Mahindra, new entrant MG Motor India has also managed to carve out a niche with its Hector. Retail sales of the car crossed 4,500 units in March, indicating the demand for such SUVs.

According to Garg, Hyundai sold 71,530 SUVs in the March quarter of 2021, while the No. 2 player sold 54,585 units. He said SUVs now form 45.8% of Hyundai’s sales in India.

According to Siam data, Mahindra leads the mass market in the six- and seven-seater SUV segment (length 4,400-4,700 mm) with sales of 45,155 cars in FY21, while MG Motor comes second with 31,585 units. Maruti Suzuki and Tata Motors reported sales of 25,832 units and 22,691 units, respectively.