Hyundai Motor Co (HMC) dispatched a high-level fact-finding team to India last month. Their task: figure out why the local unit is facing a sustained slide in market share amid escalating competition. Hyundai Motor India Ltd (HMIL) ended FY25 with a 14per cent market share—its lowest since FY13.
Alarmingly for the South Koreans, its long-held No. 2 spot in the country’s passenger vehicle market, below market leader Maruti Suzuki, has come under attack. Despite the Creta SUV more than holding its own against all comers, the automaker slipped to third position in February, recovering to second in March.
However, HMIL fell to fourth in April in wholesales or factory dispatches. Powering past it were homegrown Mahindra & Mahindra and Tata Motors. So, while HMIL was still the second-ranked passenger vehicle maker in FY25, that could change this year, just months after an IPO that raised more than `27,870 crore.
A six-member delegation from Hyundai’s global headquarters—comprising executives from sales, marketing, finance, and product development—spent a week in India last month. The team held detailed meetings with key stakeholders comprising dealers, customers, suppliers, analysts, and financiers, said people familiar with the matter.
While it is not unusual for HMC executives to visit the Indian subsidiary, this is the first instance of a cross-functional team being sent with a clear mandate of evaluating market realities and competitive challenges on the ground.
“India isa critical market for Hyundai —the third largest globally, and the headquarters is understandably concerned about the brand losing ground,” said a person aware of the development. A second person added, “They are closely watching the rising preference for homegrown brands—particularly Mahindra.”
Fresh capacity expansion
The internal concerns surfaced publicly last month during HMC President and CEO Jose Munoz’s maiden visit to India, where he addressed local employees at a town hall. Emphasising the strategic role of the Indian business, Munoz reportedly delivered the message to grow at an accelerated pace. Hyundai declined to comment on the visit, citing a silent period ahead of its March-quarter earnings. In an earlier email response to ET, HMIL chief operating officer Tarun Garg attributed the market share decline to multiple factors including a high base effect, product life-cycle stage, and the entry of new automakers.
Garg also noted that Hyundai’s new plant in Talegaon, Maharashtra, will open in the second half of this fiscal, offering fresh capacity to expand both domestic operations and exports. Its current facility at Sriperumbudur, Tamil Nadu, is already running at over 90per cent capacity.
The maker of Venue and Tucson SUVs sold 44,374 vehicles in April, behind Mahindra’s 52,330 units, and Tata Motors’ 45,199 units. Retails showed a similar trend, with Hyundai at 45,350 units, trailing Tata’s 46,000 and Mahindra’s 47,800. HMIL retained the second position in the Indian passenger vehicle market in the just-ended fiscal. Maruti Suzuki led with a 40per cent share, while Mahindra ranked third at 13%.
its public listing on October 22, 2024 at`1,820.40 per share, as against an IPO price of `1,960, shares of Hyundai have inched up 0.87per cent to `1,836.25 apiece as of Thursday. Peer Maruti Suzuki gained 8.6per cent to `12,947.30 apiece in the same period, as per data compiled by ETIG.
Underperforming models
Analysts point to a lack of all new models and sub-par performance of recent launches as key reasons for the brand’s underperformance. “Creta remains Hyundai’s only consistent volume driver,” said Jay Kale, auto analyst at Elara Capital.
“While the Exter has done reasonably well, rivals like the Tata Punch have outperformed.” “Hyundai also continues to rely heavily on first-time buyers,” he noted. Dealers corroborate the view, noting that overall customer inquiries in the domestic car market have slowed, but Hyundai’s decline has been more pronounced. “Even the Creta EV hasn’t taken off as expected,” said a senior official at a Hyundai dealership.
Looking ahead, industry experts remain cautiously optimistic. “The company’s launch pipeline is also likely to turn favourable starting with CY26, with multiple refreshes in the ICE segment and upcoming 3 BEVs positioning it well for a scale-up phase from CY26,” wrote Chirag Jain, analyst at Emkay Global in a recent report.
This year, the company is expected to introduce facelifts of existing models, and the nextgeneration Venue compact SUV. HMIL’s emphasis on cost efficiency, premium features such as ADAS, sunroofs, and higher localisation—now at over 77per cent– is also expected to support margins despite softening demand, noted Jain.
