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Hyundai Motor India is making a bold move towards a future dominated by premium vehicles and electric mobility, coinciding with its planned Initial Public Offering (IPO) set to become the world's largest this year. The company's management emphasizes its commitment to offering higher-margin, technologically advanced cars, aligning with the evolving demands of Indian consumers who are increasingly seeking features, technology, and spaciousness over conventional hatchbacks.
This shift is evident in Hyundai's average selling price, which has risen significantly from ₹4.9 lakh in FY19 to ₹6.6 lakh in FY23, driven by both premiumization and general price increases. The company has even phased out its most affordable models, demonstrating its focus on a higher-end market. The IPO itself is a testament to this strategy, aiming to raise a substantial $2.5-3 billion at a valuation of almost $20 billion.
Hyundai is strategically positioned to capitalize on the growing demand for electric vehicles in India. The company plans to launch an electric variant of its popular Creta model in the last quarter of the fiscal year, followed by three more affordable EVs. While Hyundai currently sells hybrid cars in other markets, it has opted to focus solely on EVs in India, advocating for government incentives specifically for electric vehicles. This strategy aligns with India's push for EV adoption, with the government implementing various schemes and incentives to encourage the transition.
Despite the focus on EVs, Hyundai acknowledges the potential for hybrid vehicles in the future. The company is prepared to introduce hybrids if the market shifts in that direction, leveraging its parent company's expertise. However, for now, the emphasis remains on electric vehicles and premium offerings, reflecting a calculated bet on the future of the Indian automotive market.
However, the company's focus on premiumization comes at a time when concerns about customer exuberance fading in India have emerged. Data from Jato Dynamics reveals a 17% year-on-year drop in Hyundai's weighted average retail price in September, reflecting a potential shift towards cost consciousness among Indian car buyers. Despite this trend, Hyundai remains optimistic, attributing the price drop partly to discounts offered by automakers this year and emphasizing its flexibility to adapt to market shifts. The company's strong market presence and proactive approach suggest that it is well-equipped to navigate the evolving landscape of the Indian automotive industry.
Source: Hyundai India bets big on premium cars and EVs on course to world’s largest IPO