Hyundai India recently discontinued the Santro in India. The Santro was a household name back in its day and was one of the highest-selling cars in India. Hyundai updated the model and revived the nameplate to try and replicate its success story. However, the model never really took off as the brand expected it to. Hence, Hyundai decided to pull the plug on the small car about two months back.
As per the latest reports, the reason for this was that the brand plans on shifting its focus from entry-level cars to bigger, more profitable models. Thus, the South Korean carmaker is looking at realigning its business strategy for more sustainable and profitable growth.
Not long ago, Maruti Suzuki also expressed that the company would not hesitate to discontinue some of its smaller cars. Maruti Suzuki’s statement came in the wake of the Indian government’s decision to make 6 airbags mandatory in all cars.
Rising Costs & Shift In Preferences
Hyundai India is now shifting its focus from small cars to SUVs and sedans. After the discontinuation of the Eon and Santro, Hyundai now has two hatchbacks in its lineup – the Grand i10 Nios and the i20. One of the reasons for this is the upcoming safety norms. Meanwhile, the other reason is the increased costs.
The South Korean carmaker has clearly shifted its focus from hatchbacks to SUVs. The hatchback segment currently comprises 35 per cent of the industry’s overall sales. In comparison, SUVs make up 41 per cent of the overall passenger vehicle sales in the country. This is a significant increase from its contribution of 13.5 per cent in 2015.
Tarun Garg, Director of Sales, Marketing & Service, Hyundai Motor India, said that the brand will go where the customer is. He added that the customer is now evolving and wants more technology and feature-laden cars. According to him, it is important to trace the customer trend 3 to 4 years before it becomes a trend. The stats show that first-time car buyers in India are moving away from hatchbacks and toward compact SUVs.
The average age of Hyundai buyers has also come down by four years since 2018. Furthermore, the number of people willing to spend above INR 10 lakh on cars has gone up. According to Hyundai, 37 per cent of Venue customers are first-time car buyers. Also, almost 41 per cent of Hyundai’s overall sales come from vehicles that cost more than INR 10 lakh.
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