Late to enter compact, but will make a strong statement: Hyundai's Rakesh Srivastava

Hyundai believes that that they have been able to capture the rural market even as the automobile market has shrunk by 7 percent. Although late to enter the compact segment, Hyundai believes that theyare a’ company which makes a very strong statement in whichever segment we enter into.'

Ashish K Mishra of Forbes India spoke toRakesh Srivastava, Senior vice president and division head marketing and sales at Hyundai India.

Here are excerpts from the interview:

Q: How is Hyundai looking at rural sales?

[caption id=“attachment_74989” align=“alignleft” width=“380”] Rakesh Srivastava of Hyundai India.[/caption]

Srivastava: We have been focused on rural sales. Last year we had 270 rural sales outlets and this year we are targeting about 300. Last year our rural sales were around 18.6 percent of total sales. We believe this is the way forward largely because we have the products and it is the range which that kind of customer likes to enjoy because the cost of ownership is very low in these products. If we take year on year, our rural sales have grown from 15.9 to 18.6 percent. But rural sales has actually grown when the market has shrunk by 7 percent. So if the market had grown the number would have been much higher.

How have you gone about cracking the rural sales market?

For us it has been good. We needed to make interventions in terms of channel expansions where we have a concept called rural sales outlets. This is basically a 1000 sq feet of display area, in which one or two models can be displayed and it also caters to the service requirements. So every facility has service capability with one or two bays. For this we have also picked up Hyundai champions. This is basically prominent people in villages who are influencers, so we take them on board, train them and they are attached to our channel partners. They source inquiries for us and also act as statistics providers.

How do you define rural sales?

Every manufacturer has a different definition. Above 110 cities, we look at all others as rural sales. This is in sync with us compared to other manufacturers or any other consumer durables.

Looking at the fact that you have added new models to your portfolio, is there going to be any capacity constraint?

Last year we did 6,33,000 units. We had a 99 percent capacity utilization. Out of which 3,80,000 were sold in the domestic market. Our MD who is a production expert has again recalibrated the entire manufacturing process and from the same plant we will be able to take out almost 40,000 units more. So we will have enhanced our capacity to 675000 now.

Do you believe you have been slightly late into the compact sub 4 meter space?

We are a company which makes a very strong statement in whichever segment we enter into. We have been consolidating our presence first in the compact segment where we have a 27 percent market share. In sedans we have a 40 percent stake in high end sedan with the Verna. Yes, it was but natural for Hyundai to come into compact and we have made a decision and come.

Does 2014 look like a tough year?

Last year was a very tough year. It was a year when the automobile industry actually grew on a calendar year basis. It was the first time in 15 years. For Hyundai, it was also very rewarding. So 99 percent capacity utilization so we met our business targets. Last year we also posted our highest market share since inception in India which is 20.7 percent.