Inside Hyundai's Battle To Hold On To No. 2

The Korean company has finished behind Mahindra four out of six months this calendar year

- Ayaan Kartik

The mood at Hyundai Motor India Ltd's office in Gurugram isn't exactly upbeat today. Passenger vehicle sales data for June were released on July 1. And for the South Korean carmaker, once the No. 2 in India by some distance, it once again made for dismal reading.

While most automakers struggled in June, the company has finished behind Mahindra and Mahindra four out of six months this calendar year. Indeed, it has trailed the Indian company every month this fiscal year.

Hyundai's top management has made it clear that India was a priority market for the company.

Although the Indian unit, led by managing director Unsoo Kim, has worked hard to regain lost ground, things haven't quite gone according to plan. But why exactly is Hyundai struggling today?

In Search of a Winner

Long, long ago, Hyundai had the Santro, which remained one of its top-selling models for many years and helped it firmly grasp the No. 2 spot. And now it has the Creta. But aside from this mid-size SUV, none of the company's vehicles, including a short-lived relaunch of the Santro, have been able to make much headway in the Indian market today.

The buzz inside the Gurugram offices suggests that the global products division in Seoul is squarely to blame for the Indian unit's struggles. The global division is being faulted for not coming with a product tailored to India, one that can help Hyundai regain its market share and recreate the Creta's success here.

"From a product planning perspective, there is little the domestic unit can do. It can only give feedback. But internally, there have been questions over the product strategy for the Indian market," a senior executive at Hyundai India, who did not want to be identified, told Mint. The problem, he implied, lay with the product strategy and not the sales strategy.