Successful Launch of Hyundai in India Case Study

Market Background

• Till 1980, Indian passenger car market was dominated by two players – Ambassador, Hindustan Motors– Fiat Padmini

• The Government also controlled the design & make of the cars. It had following impact on the Indian Auto market– Low CAGR (3.5%)– Owning a car remained a distant reality for the common man

• In 1980, GOI allowed a JV between Maruti & Suzuki to manufacture cars in India which resulted in a 18.6% CAGR for the next decade

• In 1993 GOI de-licensed the auto industry, making way for new players in the industry

Advent of Hyundai in India

• Hyundai was one of the earliest car manufacturers to enter India, it made its official entry in 1996

• Extensive market & consumer research were carried out by top management of the company– The purpose of the research was to understand need &

requirements of Indian consumer from a car– Hyundai also wanted to understand the distribution chain with

respect to Indian markets– Another major highlight of the research was to understand the

consumer’s preference of cars with respect to their country of origin (like Japanese cars were considered to be most fuel efficient cars)

• Became the first foreign car manufacturer to set up its own manufacturing unit in India

The real Challenge

• Indians were unsure about Korean products especially automobiles. Hence the first task was to ensure that Indian consumers develop a positive association with Korean car makers.

• Second issue was developing a corporate image for Hyundai. Since cars are high involvement product, customers will make a choice looking on the maker, service support, spares availability

• Third issue was about the design of Santro. Santro was designed to be a tall boy car and initial product testing revealed that Indians did not liked the tall boy design.

• The fourth issue was the grip of Maruti on the Indian car market.

Launch of Santro

• Hyundai Santro was launched in 1998, within a record time of 17 months

• The car was placed below 3Lakhs B segment, where it directly competed with the leader Maruti Zen and new entrants like Tata Indigo & Daewoo Matiz

• Initially, the car wasn't much liked by the analyst, as they felt the car lacked the elegance and the segment was dominated by Maruti Suzuki Zen

• To combat competition Santro was positioned as the complete family car which offered features like AC, Power Steering, Power Windows & Central Locking

India is about Bollywood

• Hyundai decided to use the likes of Shahrukh Khan to enter and compete with the existing market leader

• First TV commercial

– SRK and KIM(CEO, Hyundai Motors)…The ad introduced the brand and the company with a subtle statement from Kim : We settle only for the best.

• Teaser ad

– The first ad was followed by teaser ads where Kim tries to convince SRK that Hyundai is serious about India, the quality issue and the brand Santro.

• Final ad

– Finally came the launch ad which showed Shah Rukh who represented the Indian consumer saying " I am Convinced" to Kim. Shah Rukh fitted perfectly to the promotional scheme of Santro.

The success story

• With the launch of Hyundai Santro, within no time Hyundai emerged as the second largest player in India. Its success can be attributed to following business decisions :-

– Exhaustive study of Indian consumer, their needs and expectations from a car

– Focused on developing a strong distribution chain in India– Was the first company to tie-up with private banks for easy

financing of cars– Took an important business decision of launching Santro prior

to Accent looking at the Indian market at that point in time– Further increased their portfolio by launching Accent &

Sonata to cater to the upper segments (C & D)

Hyundai today

• HMIL is the largest passenger car exporter and the second largest car manufacturer in India

• It currently markets nine car models across segments

• Hyundai India forms a critical part of Hyundai’s global export hub

• It touched 1.5 million in exports in March 2012. It currently exports to more than 120 countries across EU, Africa, Middle East, Latin America and the Asia Pacific

• Hyundai currently has 346 dealers and around 800 service points across India

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