In response to gains in market share by rivals, Hyundai Motor Co. is studying a plan to make a network of up to 1,000 rural outlets and is presenting a more affordable small car. Volkswagen AG and Ford Motor Co. have both increased their share.
Arvind Saxena, Hyundai’s India director for sales and marketing, said that the carmaker has been examining these markets and seeks to focus on expanding the network in those areas. He didn’t provide a timeframe for this plan.
Hyundai wants to concentrate its expansion in rural areas that have a small number of dealerships as the growing economy in India is distributing wealth beyond the urban regions. Hyundai’s sales in India increased by about half the rate of the overall market in the last fiscal year.
Its rivals -- Ford, Volkswagen and Toyota Motor Corp. – have offered more models and have opened showrooms in cities. Darius Lam, a Bangkok-based analyst with J.D. Power Asia Pacific, said that the focus will have to be on rural markets as it will be increasingly difficult to grow in urban markets.
To increase rural sales, Hyundai will soon offer the Santro, its cheapest model in India, with a price tag that’s lower than 293,902 rupees ($6,576). He didn’t say though when it will go on sale.
It’s expected to go up against Maruti Suzuki India Ltd.'s Alto compact, the best-selling car in the country. Saxena said that Hyundai aims to add two new models a year in India. Last Thursday, it unveiled a new version of the Verna sedan, which has a starting price of 699,000 rupees but could go as high as 1.07 million rupees.