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Business & Operation Strategy of Hyundai Motor India Limited






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Abstract Issues Background

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Entry Into Indian Market Factors Responsible for Success Comparative Chart Between Different Car Companies

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Marketing Concept Business Strategy Latest Scenario Bibliography

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The Indian passenger car market just had two players till 1980: Ambassador Fiat Padmini The GOI gave the instructions as to what type of vehicle the 2 companies should manufacture.

Reason GOI s decision was to keep the car industry tightly protected.without any interference from the other domestic or foreign co. No one was allowed to enter the industry.

Disadvantages of Restriction: Technologically backward Indian cars. Car prices remained high as compared to the quality. This affected the growth of industry. CAGR over 2 decades(1960-80) was just 3.5%.

In thr year 1980 GOI allowed a joint venture b/w Suzuki & Maruti. In 1983, Maruti launched a small and affordable car called Maruti 800 at price of Rs 40000. This led to the growth of Industry. CAGR over 1 decade(1981-1990) was 18.6%..

Finally In 1993, the GOI de-licensed the automobile industry and entry of domestic and foreign car manufacturers. Was allowed.


Entry of Hyundai In the Indian Market Scenario

Hyundai Entered the Indian market in 1996 through HMIL

It studied the market scene for one year before venturing into the market. Talked to vendors, dealers and customers to get a thorough knowledge of the industry. They did a survey, where customers were asked to rank their preference for cars by the country of origin.

Iinitially Accent was to be its first car in India. However they ended up launching Santro as the first car.

May26, 1996 HMC established its plant in Tamil Nadu , near Chennai @ 614Mn. Plant had a capacity of producing 1.2 lakh cars and 1.3 lakh engine trans. units PA.

HMC s foray into Indian car market was unique in 2 ways: HMC set up its whollyowned subsidiary, HMIL. It first foreign car manufacturer to establish a manufacturing unit .


S u c c e s sS t o r y

HMIL s first car, Santro came out of the plant in less than 17months. It was Priced at Rs 2,89,000 , was placed in B segment of the Indian car industry. The success was not predicted, because it was felt the car lacked an elegance, appealing look, moreover the B - segment was dominated by Maruti zen at that time.

Contrary to expectations, Santro became a major success, selling 75,000 vehicles between April 1999 to March 2000 becoming the largest selling car in B segment.

With the success of just one model, Hyundai became second largest automobile manufacturer in India, across segments


Factors contributing to Hyundai success in India

They did a close study of the Indian market.

A complete market research was carried out the Company top officals.

Ideas and other information was taken from vendors, dealers and customers.

Surveys in detail was carried out.


Analysis of the mindset of the customers and their demands

Launched Santro instead of Accent.

Products with advanced technology was introduced

Newly innovated marketing technology


Some USP of Hyundai

Hyundai came into the Indian Scenario through its own subsidiary HMIL.

It was the first foreign company to establish its won manufacturing unit

Hyundai also launched a complete new product unlike other players.


Innovation and attractiveness introduced in design and features.

An attractive and intelligent advertising strategy was carried out

Emphasis on Customer satisfaction was given.

Elaborate procedure for dealer selection which included:

Education background

Financial net worth Income details Investment and loan details

They studied their dealers credibility in detail

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Marketing Mix


Its first B-Segment Car SANTRO was launched in 17 months. This was newly innovated with latest technology car for for Indian Market. It had far more better features than its competitor cars Features like AC, Heater, Power steering, Power Windows, and Central Locking for a B segment car. ACCENT was launched targeting the C-Segment category in 1999 Accent had technology and Luxury on par with Japanese Mitsubishi Lancer. It was launched in both Petrol and Diesel Versions. It rapidly became 3rd in terms of Market Share.

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In the year 2002 they launched Sonata in D-Segment category. Due to volatility and increase in competition and price wars they came up with a Improved version of Santro known as Santro Xing. Elantra was launched on 15th April 2004 for the D-Segment to be moreaccessible. By the mid of the year 2004 HMIL became the second largest company with its 4 models Santro, Accent, Elantra, Sonata with 19% Market Share. Finally They Launched Getz in 2004,for Upper B-Segment so that counter the competition imposed by Wagon-R of Maruti Suzuki Limited The latest models they launched for Indian market are i-10 and i-20 and Hyundai Accent Executive.

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Santro was launched at Rs 2,89,000 far below Zen which was priced at Rs.3,45,000. They kept there pricing Based on Customer Value Perception. Their C segment car The Accent was priced at Rs. 5,35,000 much below what Lancer was Priced at Rs.7,80,000 targeting C-Segment. They launched Accent CRDi at Rs. 7,25,000 much below any one would have expected. Experts were quick on commenting CRDi technology is a Leap not a Step. Sonata was launched at Rs.16,00,000 which was again priced below Honda Accord which was priced at Rs17,00,000.

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Launched Elantra at Rs.8,69,000 so as to fill up the gap between C and D Segment. It also competed in terms of Value for Money with Toyota Corolla , Skoda Octavia, And Optra. They launched Getz at a price of Rs.4,30,000 to get a car between Santro and Accent targeting Upper B-


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India was chosen for a Number of reasons: The Indian Government De-Licensed the automobile Industry and the liberialzation was introduced in Indian Economy. It had a huge potential for growth as Indian market and especially the rural market was untapped There was only one player in the market Maruti which had cars for B-Segment. Therefore on May 26,1996 there first plant in Irrungattukottai Near Chennai at a cost of 614 million dollars was opened. It had a capacity to produce 1,20,000 cars and 1,30,000 engine transmission.initially

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It got the first major advantage as it became the first foreign company to set up its Manufacturing Unit in India. The labor cost in India is low. The manufacturing cost is less in India. Selected dealers react fastly to the changing market needs HMIL decided to Tap Rural Market. In the MID 2003 Capacity of production in India less as compared to MUL.

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Since it was a new Brand they emphasized more on Promotion Saatchi & Saatchi handled the promotion of Santro. It was Promoted in 4 phases as explained by the Videos. It was a campaign that used Humor to remove ignorance about Hyundai. New Customer Satisfaction Campaign. Was launched Promotion of Accent was done more by Print Media than on Television. Accent was positioned with a baseline The Next Step.

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Accent Promotion was handled by Grey Worldwide India. Film celebrities like Preety Zinta and ShahRukh Khan were used for promotion of the new version of

Santro Xing The Sunshine Car. Various RoadShows were organized in Rural Market to promote Santro. A Young man driving Accent CRDi.was shoed in its ad showing its popularity among youth. Tie up with PNB for financing of there cars. And to promote the brand

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Business Strategy

Hyundai entry into the Indian market was unique in every sense. It initially positioned itself as a B-Segment car manufacturing company by launching SANTRO. Technologically superior products which provided Value for money. In order to develop a better image it launched Innovative marketing strategies positioning at better safety, better product and better features. The Indian Middle Class was targeted by providing a affordable family size car. They basically focused at providing a car satisfying Indian Needs instead of importing a successful model. It surveyed the market before entering. The dealer selection was done with great care and they regularly interacted with the dealers.

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They established themselves as a company providing cars that had better features, Better Technology and was safe. It positioned itself in stages as a company having cars for the entire market segment. Launched Accent CRDi which was one of the best Diesel Car in its segment. It was considered as a Leap and Not a step. Sonata was Positioned as a Premium car that was Dreamt about by everyone, Owned by a select few. They decided to reposition Santro as a Sunshine Car targeted for the age group

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